How to structure a company's financial sector?
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How to structure a company's financial sector?

💵 The finance department is the sector responsible for managing the company’s resources. It controls the treasury, investments, risks, and all the financial planning of the institution.

But then, do you know what the functions of this department are, how it works, or how to structure this sector? If you answered “no” to any of these questions, continue reading this article and find out the answers.

❓What is the role of the financial sector?

The financial sector is responsible for guaranteeing resources so that the company can fulfill its objectives, guaranteeing not only immediate profits but also long-term.

This area also has the function of exercising treasury, accounting, financial planning, account management, risk, tax, and investor relations.

For that reason alone, you can already get an idea of ​​how important the financial sector is within any organization. But do you know how to structure a company’s financial sector? I have separated some tips for you. Check out!

📋 What is the organizational structure of the financial sector?

Nothing better to learn to structure this sector of the company than to learn about the organizational structure, which is nothing more than the way an organization is divided and hierarchical.

It defines how its activities are managed and the communication between its sectors, aiming to achieve its strategic objectives.

First, one must study the administrative scope of the business in question. If it is a small company, it is possible that only one treasury is enough to control the company’s accounts.

If we are talking about a medium-sized company, we need a working capital management area, for example. If the company in question is large, an audit and accounting area is necessary.

After that, we must divide the financial area according to the company’s performance, establish clear, clear, and very well-defined lines of authority for each sector and define responsibilities clearly for each party involved.

In addition, knowing how to assess the amount of labor required for the financial area is also an item that must be mastered by people who want to know how to structure a company’s financial sector.

🖊 Acquire knowledge in business management

The knowledge of the financial area alone is quite extensive, including financial, economic, and accounting knowledge. But it is not just knowledge in financial management that will make you conduct this sector with mastery.

In addition to these, it is also necessary to acquire diverse knowledge from different areas and thus have a more systemic view of the organization’s business, outline better actions within the financial area, and optimize the results of the organization as a whole.

🏷 Make strategic planning

You can’t just focus on short-term management. It is important that the financial area has a strategic direction, a clear definition of where you want to get to, what profitability you want to achieve.

This should all be in line with the organization’s objectives. It is important to have a strategic financial plan that speaks to the organization’s objectives. This is fundamental to structuring a company’s financial sector.

It is important that the financial management area presents a consolidated budget. The budget cannot be one-way financial management, it is necessary to talk to the specific managers of each area.

In order for the budget plan to be actually fulfilled, it is important to follow the budget plan instead of just doing it.

🏷 Make cash flow

There are two types of cash flow, realized and projected cash flow. It is important that both are carried out concisely and in line with the company’s objectives.

The realized cash flow is constructed based on the information provided, that is, the inflows and outflows of money that have already taken place in the company. It allows the company to monitor the financial balance and make more assertive decisions.

The projected cash flow consists of the projection, for a given future period, of the company’s cash inflows and outflows, counting its accounts payable and receivable from future dates within that period. It seeks to anticipate risk situations.

🏷 Use spreadsheets!

Using spreadsheets is a great way to structure a company’s financial sector in an easy way! There are now several models on the internet that we can use that are 100% adaptable.

🟡 How to create a finance department?

Next, you will see how to set up a company’s financial department in practice, which requires great effort. The team has the challenge of managing and establishing control over 7 sub-areas:

Accounts payable and receivable; Treasury; Tax management; Accounting; Financial planning; Risk management; Investor relations.

Based on this scenario, the financial area will be properly structured to provide a basis that will allow the company to advance in its objectives.

From the moment a manager chooses his own financial sector, it will be necessary, mainly, to strive to design the area, including activities, processes, and other demands such as people management and planning.

In any case, it is valuable to create and maintain an internal structure of operations, with an experienced team, which is capable of delivering results with high performance, so that it can respond to any situation quickly and assertively.

To make the process of setting up a financial sector even clearer, pay attention to issues such as mapping the main demands and positions, making a selection process, preparing training, and assembling the team.

It is necessary to keep in mind, for example, that the idea is to have a balance between the different profiles and professionals, but not all competencies are required or desired equally by each organization – some have routines and values ​​that privilege the use of specific skills.

After conducting a mapping, a business decides what the main competencies are so that the area is touched in the best possible way. Among the characteristics, it is important to highlight that there are those at the business level, others linked to leadership ✅ and to the activities themselves, and still others related to technical training and processes.

Mapping these competencies is essential for the financial sector – and, obviously, everyone else – in the company, but, far more important than recruiting people with these competencies, it is in fact using and implementing the concepts when dealing with the employees and future employees.

💻 How to automate the finance department?

The automation of the company’s financial department ensures numerous gains for the company. Among the main ones, we highlight:

🔴 Increased productivity: tasks will be done in less time; Results in real-time: more knowledge of the business and better targeting of resources; Ease and agility in the communication between the areas: the systems integrate processes and facilitate the work between different teams.

But how to automate the finance department? Below, we highlight a step by step:

📄 Map financial processes that should be automated

At first, the entrepreneur must identify the processes that can be automated and in what order this should happen. Each item must be mapped and written clearly, avoiding multiple interpretations. Among the activities that can be automated, we highlight:

🔴 Diverse reports: when updated in systems and in real-time, they allow teams to be updated on certain situations quickly; Automated billing: allows sending invoices and invoices, on previously established dates; Collections: it allows companies to automatically send collections to customers who are in arrears, which helps to control the default rate; Contract readjustment: updates contracts in an automated way to avoid losses from any delays.

It is worth mentioning that these are just some of the possibilities for automation in the financial area. However, more important than that is to identify in your company which is the processes that must consume the efforts of the teams and automate those that directly interfere in the team’s productivity and in the results achieved.

📲 Adopt technology

Another great idea to automate the area is through the adoption of a financial management system. After all, processes controlled by paper or spreadsheet can make the financial management of a business slow and bureaucratic.

Therefore, you can adopt software to have more efficient, practical, safe and low-cost processes.

🔗 Integrate other areas

Implementing an automated system is feasible when the different areas of the organization rely on data gathered on a single platform. This means, for example, that the information filled in by the sales team is updated instantly so that the finance officer is already aware of a new resource that has entered the company’s cash register.

This integration allows risks and errors to be minimized, which also indicates an effective improvement in management as a whole since it is possible to start analyzing the organization from a broader perspective.

🧾 Invest in training for teams

The success of an organizational strategy is directly linked to the qualification of the team. Therefore, it is essential that the team is fully prepared to deal with the most diverse contexts. Thus, team training is essential for everyone to be aligned around the same goals and objectives.

In this sense, you will have a much more productive and qualified team, which will be able to present more suggestions for improvements for the company’s growth.

🔚 Conclusion

What do you think of these ideas for structuring a financial sector? As we have seen throughout the text, there are numerous possibilities and, at the same time, several challenges. Therefore, start with the tools at hand and, little by little, you will be improving your processes, so that you can count on a more professional area, aligned with the objective of establishing your company in a context of continuous growth.

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Enjoy other free articles about forex trading on the trading Academy and on our free forex Telegram channel.

Disclaimer: Forex and Contracts for Difference (CFDs) are complex instruments and come with a high risk of losing money due to leverage. Forex trading is not suitable for everyone. You should consider whether you understand how forex and CFDs work and whether you can afford to take the high risk of losing your money.

The forex brokerages displayed shall disclaim the overall performance of traders in their platforms. Oanda warns that 76.8% of retail forex traders lose money trading CFDs. XTB warns that 80% of retail forex traders lose money trading CFDs.

FXCM warns that 74.74% of retail forex traders lose money trading CFDs. The performances aforementioned are not related to Wiseinvest AI forex trading and AI forex signals system. You can check the performance of our AI forex system on our dashboard.