As a new division manager for Company X, it is important to understand the role the finance department can play in shaping your decisions. For example, the finance department is responsible for spearheading financial planning for the upcoming year. The results of financial planning, especially the pro forma balance sheet, are invaluable tools in determining what steps must be taken in the upcoming year to be successful. The pro forma balance sheet highlights anticipated deficiencies. The anticipation of such deficiencies gives the new division manager a chance to rectify mistakes made in the past. Thus, the finance department gives the new division manager a roadmap for decision making in the year to come (Gitman, 2009).
It has been said that accounting is “the language of business” (Arkansas State University College of Business, 2002, para. 2). As such it is natural that the finance department publishes external documentation of the organizations health in a standardized format. Just as Company X’s finance department does this, so does the finance department of other organizations. The finance department can use this documentation in valuing the opportunities of future acquisitions. As a group that is skilled in the generation and analysis of financial recordings, the finance department is uniquely suited to the role of determining the potential value of another organization.
Finance departments are guided by a number of ethical systems. For example, certain laws make unethical actions illegal, corporations often set their own ethical standards, and accounting bodies have their own codes of conduct. The finance department must constantly monitor its actions and requests from external departments to ensure that ethical standards are adhered to. Often the most difficult ethical considerations must be made when the finance department is pressured from another department to manipulate information. The finance department must work hard to maintain the highest ethical standard in order to ensure the stakeholders of the organization receive the most accurate information (Aktinson, Kaplan, Matsumura, & Young, 2007).
Finally, it is important for the new division manager to form a good working relationship with the finance department. Accountants are often confused with bookkeepers. It is imporant to keep this disctinction in mind when dealing with the finance department. The finance department is staffed with individuals that are ready to analyze data and provide meaningful feedback regarding a number of financial problems (ASU, 2002). Remembering that the finance department is full of accountants that want to solve interesting and challenging problems is the best way for a new division manager to strike up an immediate rapport.
Arkansas State University College of Business. (2002). What is accounting? Retrieved December 1, 2008.
Atkinson, A. A., Kaplan, R. S., Matsumura, E. M., & Young, S. M. (2007). Management accounting (5th ed.). Upper Saddle River, NJ: Pearson.
Gitman, L. J. (2009). Principles of managerial finance (12th ed.). Boston: Pearson.