CHAPTER 3

MANAGING THE
FINANCE
FUNCTION
Arthur Mendoza Jr.

01
 Financing 02

Investing

Negotiating and Deal

Making Managing The
Administering Finance
Numbers Generation Function
Analysis and Reporting
SEVEN IMPORTANT PROCESSES
Cash and Treasury
Management

Evaluating and Planning

acronym of FINANCE
 Who is the Finance
Person?
AWIT

Is the harnesser, allocator and provider of funds,

the balancer of growth, profits and sustainability,
the gatherer of information and reporter of
information for presentation to the board and the
enterprise managers.

03
 Who is the Finance
Person?
NOT SO AWIT NAMAN PALA

Is the corporate planner who assesses where the

funds should go, and what action programs
should be undertaken

04
Translating 05

Corporate Goals
and Operating
Plans

Operating Plans
into Investment
and Financing
Plans
 06

Financial Plan

Brings the overall corporate vision, mission and

policies and the corporate financial objectives
and performance indicators together
Financing Investment
Decision Decision
Sourcing of Funds Usage of Funds

Liabilities Management Asset Management

02
 07

Sub-Objectives

Minimize the cost of funds

Financing To remain financially liquid

and solvent in order to meet
financial objectives and loan

Decision
covenants imposed by the
creditor
To achieve financial flexibility
Maintain financial control
Minimizing financial risk
 08

Sub-Objectives

Maximize the ROI

Optimizing Liquidity and the
Solvency position of the
company
Investment
Decision
To Achieve Investment
Flexibility
Asset Control
Minimizing the investment
risk
NEGOTIATING AND DEAL MAKING
HOW MUCH FUNDING IS NEEDED FOR THE DEAL?

WHAT ARE THE BUSINESS FINANCIAL RISKS?

WHAT WILL THE COMPANY GAIN FORM THE DEAL?

WHAT WILL IT HAVE TO GIVE UP?

WILL THE INTERESTS OF THE DIFFERENT COMPANY

STAKEHOLDERS BE SERVED AS WELL?
09
 JOINT VENTURES AND PARTNERSHIP
AGREEMENT

MERGERS AND ACQUISITIONS

FRANCHISING AND LICENSING

CONTRACTS

10
 Administering
MANAGING

Must master the art and science of managing

people, managing information, managing systems
and managing policies

11
 12

Numbers
Generation,
Analysis, and
Reporting
Good Financial Forecasting
 13

Cash and Treasury

Management
INFLOWS AND OUTFLOWS
14

EVALUATING
AND PLANNING
Orchestrates the entire corporate
planning process