A corporate business may have several departments that deal with the corporate budget. While the accounting department will deal with the practical budget tasks, such as tracking the money coming in and out of the business, the financial department will take the information given by the accounting department to plan ahead for a more functional budget and flourishing business.
The accounts receivable is a job position in the accounting department that is responsible for receiving any money or outstanding funds from customers or other streams of income. The accounts receivable must verify customer’s accounts and balances, contact the customers to ask for the funds, send out invoices, create receivable reports and post the paid invoices and close the sale. The accounts receivable is responsible for obtaining all the money owed to the business, so the business has a positive income and overall net worth of the operational budget.
The accounts payable also works in the accounting department. The accounts payable workers are responsible for all of the money leaving the business to cover unpaid debts or liabilities. All of the money going out of the corporation must be properly documented, so the business knows exactly how much money is spent on a monthly basis. The accounts payable are responsible for paying bills on time, paying vendors or product suppliers for their shipments and address any other payments due within the month. If anyone needs to purchase something on the company account, the accounts payable is the department to go to.
The financial department, or management of a corporation, is responsible for the company’s assets and liabilities for the most part. This department deals with acquiring funds for the corporation and plans out how the company will grow financially, in terms of its overall net worth. Although the financial management does not deal with the operational budget of the business directly, the decisions made by the financial team can affect the budget, especially if the financial team increases liabilities over time. This means the business will have to do more sales to make money to pay off those liabilities.
Forecasting Financial Needs
A few employees within the financial management department may be responsible for predicting or forecasting the corporate budget’s standing over a given period. This includes the short-term forecasts such as the revenue, profits, costs and expenses over the next year. It also includes long-term forecasting, such as improving a company’s overall financial status to make the business more appealing to investors and shareholders.