Marketing department

What’s it: The marketing department is a division of the company with responsibility for the
marketing function. This department aims to sell as many products as possible in a sustainable
manner. The team designs marketing strategies and combines the right marketing mix to satisfy
customer needs and wants. They design the right product at the right price for the right
consumer, at the right place, and at the right time. They are also responsible for developing
promotions and managing long-term relationships with customers.

The role of the marketing department

The marketing department is responsible for identifying, anticipating, and satisfying customer
needs and wants profitably. The end goal is to make more profit. Fostering long-term
relationships is also another task; thus, money keeps flowing into the company.

The marketing department is at the forefront because it interacts directly with consumers and
determines the success or failure of the company in generating revenue. In addition, this
department must also synergize with other departments to help achieve corporate goals.

Besides playing an important role in promoting products and increasing sales, the marketing
division is also important to introduce the business, thereby generating a strong corporate image.
Moreover, the team reaches not only customers or retailers but also investors and the community
while creating a corporate image in the eyes of these stakeholders.

Marketing department functions

The marketing department monitors market trends and identifies consumer needs and wants. The
team then developed a marketing strategy to create more awareness and purchases by customers.
In addition, they perform various tasks and activities such as market research, test marketing,
advertising, and branding.

Functions related to the marketing mix

In general, the marketing function can be associated with managing four marketing mix
variables: product, price, location, and promotion.
Product. The marketing team designs products to meet customer requirements, such as the core
function, quality, size, color, and product packaging. Another role is to map product positions,
develop unique selling propositions, and design product differentiation/standardization to suit
market tastes and demands.

Price. The marketing division sets the right pricing strategy for the products sold. Various pricing
strategies include cost-plus pricing, competition-based pricing, loss leader pricing, penetration
pricing, and zone pricing. Which is the right pricing strategy? It depends on factors such as
market demand, production costs, and competitor pricing.

Promotion. The marketing division is responsible for informing and persuading consumers to
buy the company’s products. It combines various activities, such as advertising, sales promotion,
personal selling, direct marketing, sponsorship, and public relations.

Location. The marketing division manages how the product reaches the customer. It determines
which distribution channels are used and how intensively. Thus, the product is available in the
right place and at the right time. It involves choosing the right channel to market the product, for
example, distribution, online purchasing, retail outlets, or even vending machines.

Marketing department responsibilities

Specifically, the responsibilities of the marketing department vary between businesses. It

depends on aspects such as the size of the business, the company’s strategy, and the resources at
hand. They may include:

Market research – identifying customer needs and wants. It may be through surveys, interviews,
or observations. The team segmented the market, selected target market segments, developed
consumer profiles, and developed the appropriate marketing mix. After the product is sold, the
team also examines whether the product and the efforts made, such as advertising, are successful
or not.

Competitive analysis – observing competitors and identifying their market position and
strategies. It is important to develop responses and design appropriate competitive strategies and
tactics.

Promotion – presenting the company and its products to consumers, building brand awareness,
and strengthening the product and company image. The team selects and manages the most
appropriate promotional mix, whether advertising, sales promotion, or direct selling.

Sales – responsible for making money by selling products or providing services. This function
requires synergy with other business functions to support increased sales. In addition, the team
must also design the right marketing mix, such as designing attractive packaging and correct
pricing.

Product management – evaluating and mapping products to determine the right strategy, for
example, whether to withdraw, increase investment or collect as much cash as possible. A large
company can have a product portfolio consisting of various products and target markets.
Managing them requires intensive effort. The marketing team is tasked with mapping the market
position of each product to determine strategy, resource allocation, and investment. Two useful
tools are the BCG Matrix and the product life cycle.

Marketing information management – managing and integrating marketing information such as

sales targets, sales realization, industry competitors, customer profiles, and market trends. The
data is valuable for developing marketing strategies, making decisions, or designing the
company’s overall strategy. For example, information about sales targets is important for making
production decisions.

Pricing – determining the sweet spot between customer value and company profits. A company
may choose cost-based pricing, with the main consideration being the cost of production. While
others prefer market demand-based pricing or competition-based pricing.

Budget – responsible for managing the allocated marketing budget. Marketing managers must
secure space in the budget to fully support the marketing strategy. A sufficient budget is
important to generate more revenue, expand into new markets, and reach more potential
customers.

Distribution – developing the right distribution channels to reach customers. A company might
sell products directly to customers by establishing a retail outlet or creating an e-commerce
channel. Alternatively, they rely on various intermediaries such as distributors and retailers to
sell products.

Customer relationship management – this responsibility includes studying their target customers,
determining how best to reach and meet their needs, maintaining good relationships with them,
and encouraging them to continue purchasing the product. Since recruiting new customers is
expensive, this responsibility is crucial to keep the money flowing to the company.

Branding – responsible for managing the brand and ensuring the brand is marketed appropriately.
There are various branding strategies, including individual branding, family branding, or
corporate branding. Each has advantages and disadvantages. The marketing team’s duties
include building brand awareness, developing the brand, driving brand loyalty, and creating
brand value.

Online channel management – manage and maintain online channel pages such as corporate
websites and social media. This is becoming increasingly vital as consumers get more and more
online. Companies use online channels to monitor and find out what’s trending, build good
relationships with customers, and even promote products.

Relationship between the marketing department and other departments

Companies must coordinate various business functions to create synergies. It is essential to

achieve business success, which contributes to building a competitive advantage.

In carrying out its functions, the marketing department also depends on other departments. Here
are some examples:

Finance department – coordinating sales targets to prepare budgets and cash flow forecasts.

Human resources department – coordinating workforce planning, recruiting new staff, and
training and developing existing marketing staff.

Production department – coordinating product specifications and product attributes, production

capacity, inventory, and logistics of raw materials.

Research and development department – developing new products according to market tastes
based on information from the marketing department.

Information technology department – developing databases and information systems to support

marketing activities such as customer relationship management software.
Public Relations

Public relations is a strategical approach towards the creation of goodwill and brand image
through developing a cordial relationship between the organization and its target audience. Every
organization exists in a social, legal, and political environment where it has to interact with
different agencies and individuals.

For Example; The fragrance brand Old Spice innovatively captured the attention of the public
towards its new cologne product called Captain.
The company noticed that the strong smell, which usually comes out of magazines, does not
appeal to the readers.

Thus, the brand inserted a paper blazer within their published advertisement in the GQ magazine
with a description of its benefit. It also humorously mentioned the drawback, which was that the
blazer could not be worn in rainy weather.

The advertisement was a center of attraction for men since this particular product has a popular
masculine fragrance. This public relations and marketing strategy took the target audience,
including the media by storm.

Importance of Public Relations

When a company is involved in manufacturing or buying products and selling them to make
some profit; What is the need for public relations? Why do companies invest so much in public
relations practice? Why do they have a PR department? Why are the PR experts appointed?

Increases Awareness: The company and the PR department primarily focus on spreading
awareness by making people understand the product specifications and brand values.

Creates Brand Image and Reputation: The company has a chance to improve its image and
build up a reputation among the public through public relations practice.

Develops Loyalty: The customers generate a loyalty factor for the brand because of an intense
public relations practice. They tend to buy from the company repeatedly.

Promotes Goodwill: In the long term, public relations practice paves the way for creating
substantial goodwill for the company.
Builds Trust and Credibility: The repetitive brand promotion, done in a way to align the
company’s objectives to those of society and the target audience, develops trust and credibility
among the public.

Types of Public Relations

Media Relations: The PR department collects information from the press or media sources while
maintaining cordial relations with them. This data is used by the company to plan its marketing
strategies.

Investor Relations: Investors are essential to the organization. Hence, the PR department keeps
them informed, manages their events, releases financial reports, and manages queries and
complaints.

Government Relations: Adherence to various government regulations like corporate social

responsibility, employee welfare, consumer protection, fair trade practices, etc. builds an
organization’s relationship with the government.

Community Relations: Society plays a crucial role in deciding the company’s as well as the
product’s future. An organization needs to create a positive image of the brand by supporting
social practices like say no to child labour, child education, equality, environmental protection,
etc.

Internal Relations: Communicating with the employees and counselling them on their
responsibilities, duties and actions helps in their better performance and long-term existence in
the organization.

Customer Relations: Interaction with the valued customers and potential consumers is necessary
to know their feedback, suggestions, interest and priorities. This data is required to prepare
further business-related strategies.

Marketing Communications: The company uses different marketing strategies like brand
awareness program, product launch, marketing campaigns, product positioning, etc.
Functions of Public Relations

The organization appoints PR experts, and some of the prominent organizations even have a PR
department. It enhances the company’s image, builds goodwill, and attracts investors, customers,
media and other associates.

Product Publicity: The company organizes brand and product promotion through sponsorships
to gather customer’s attention.

Press Relations: The company uses the press or the media to provide information about the
product to the customers.

Lobbying: The PR experts communicate with the government officials and the legal department
to support the favourable regulations and defeat the unfavourable ones.

In-House Journals: The brands launch their magazines and booklets to promote the products
among the customers. It also publicizes the annual reports, newsletters, websites, brochures and
annual reports to capture the target market.

Corporate Communication: The PR department is continuously engaged in providing

information about the product and the brand through internal and external communication.

Special Events: The PR experts organize events such as charity event, promotional events or
contests to capture the attention of the media.

Public Service Activities: The companies often stand for social causes. They invest their time
and money and ask their employees to support such causes. This indirectly enhances public
relations in the organization.

Counseling: At the time of product failure or poor performance, the PR department provides
suggestions and advice to the management.
 Human Resources
Human Resource Management was originally known as personnel or people management. In
the past, its role was quite limited. Within any company or organization, HRM is a formal way of
managing people. It is a fundamental part of any organization and its management.

The main responsibilities of the personnel department include hiring, evaluating, training, and
compensation of employees. The human resources department deals with any issues facing the
staff in their working capacity within an organization. HR is concerned with specific work
practices and how they affect the organization’s performance.

Today, Human Resources Management deals with:

 Anything related to managing people within a company or organization. This means

decisions, strategies, principles, operations, practices, functions, activities, and the
methods used to manage employees.

 The type of relationships people have in their places of employment and anything that
affects those relationships positively or negatively.

 Ensuring that employees are satisfied with the conditions of their employment. This leads
to better services and production of goods and helps the company’s success.

When we talk about human resources in a business situation it means the workforce, i.e., the
employees of a company and what skills and energy they bring. This includes any ideas,
creativity, knowledge, and talents that employees bring with them and use to help the
organization be successful. In other words, the resources a person has or the knowledge and
experience developed over the years.

HRM focuses on bringing in (recruiting) new employees with new talents for the company and
managing employees. Another function is to guide and help said employees by providing
direction when necessary. In a large organization, with a lot of people, it is important to have a
department that specifically focuses on staff issues. These issues are things like hiring,
performance management, organizational development, training, occupational health and safety,
motivation incentives, communication, workplace culture, and environment.

Human Resource Management is now a vital part of any organization. Every company or
organization is required to have this department. It helps with increasing the morale of workers
by working on relations between employees and their employers and constantly striving to make
them better. The HR department also provides any support employees need to assist them
improve their performance.
The HRM function extends to assessing the productivity and/or success of every department in
an organization or business. It assists each department and helps them improve their work. It also
intervenes

when necessary to help solve any problems that might arise with regards to employees’ work.
Getting better results from the company’s workers is another job of HRM.

When a business has valuable, rare, and/or unique human resources it will always have a
competitive advantage over other similar organizations.

Below are the criteria used in Human Resource Management – when using these effectively, a
company can make an impact in its particular field.

– Value Building: People who try hard to decrease costs and to provide a service or product
unique to customers, can increase their own value as employees and that of the company.
Organizations also use empowerment programs, quality initiatives, and strive for continual
improvement in order to increase the value that employees bring to the company.

– Rarity: When the skills, knowledge, and abilities of employees are not equally available to all
companies in the same field, the company that has these people, has a very strong advantage.
This is why top companies endeavor to hire and train the best and the brightest employees. This
way they gain advantage over their competitors. In some cases, companies will even go to court
to stop other organizations from taking away their valued employees. This proves that some
companies have clearly identified the value and the uniqueness of certain employees.

– Incomparability: Employees give their companies competitive advantage when their

capabilities and contributions cannot be reproduced by others. That is, the knowledge and skills
that they bring to the organization are unique and not easily found elsewhere. Certain
corporations such as Disney, Southwest Airlines, and Whole Foods have, over the years,
developed very distinctive cultures that get the most from employees. These cultures are difficult
for other organizations to imitate. Southwest Airlines, for example, rewards the employees who
perform well. It is also able to maintain employees’ loyalty through offering free airfares and
profit sharing in the company.
– Organized work force: People with unique talents can help a company achieve a competitive
advantage when they can easily be reassigned to work on new projects without much notice. In
order for this to happen teamwork and co-operation are needed and the creation of an organized
system.

The criteria above show the importance of people power and also the link between human
resources management and performance management. Many high-functioning organizations now
know that their success depends on the knowledge and skills of their employees, or, their human
capital. Human capital is aligned with the economic value of employees with the right
knowledge, skills, and abilities. Their knowledge and skills have economic value. Managing
human capital properly is imperative for any organization wanting to maintain a competitive
advantage. In some ways it is the most important part of an organization’s human resource
function.

The Objectives of HRM

The objectives of HRM are the goals of an organization. Individual or group activities are then
organized in such a way so as to achieve those objectives or goals. Organizations and companies
aim to secure and manage certain resources, including human resources, to achieve the specified
goals.

Human resources must therefore be managed in a way that uses their resources to achieve the
organizational objectives/goals. Basically, the objectives of HRM come from and contribute to
achieving organizational objectives.

Objectives of HRM:

1. To establish and use a workforce that is able and motivated, in order to achieve the goals
of an organization.

2. To create the desirable organizational structure and working relationships among all the
members of the organization.

3. To integrate individuals and/or groups within the company by matching their goals with
those of the company.
 4. To ensure individuals and groups have the right opportunities to develop and grow with
the organization.

5. To use what human resources a company has in the most effective way to achieve
organizational goals.

6. To ensure wages are fair and adequate and provide incentives and benefits thereby
satisfying both individuals and groups. Also, to ensure ways of allowing recognition for
challenging work, prestige, security and status.

7. To have continual high employee morale and good human relations by establishing and
improving conditions and facilities within the organization.

8. To improve the human assets by providing appropriate training programs on a continual

basis.

9. To try to effect socio-economic change in areas such as unemployment, under-

employment and inequality by distributing income and wealth. This way society can
benefit. Added employment opportunities for women and the disadvantaged will also be
impacted in a positive way.

10. To offer opportunities for expression.

11. To ensure that the organizational leadership works in a fair, acceptable and efficient
manner.

12. To ensure a good working atmosphere and employment stability by having proper
facilities and working conditions.

Functions of Human Resource Management (HRM)

Human resource management must plan, develop, and administer policies and programs that can
make the best use of an organization’s human resources. This is the part of management’s role
which deals with people at work and their relationships within the organization. Its aims are:

1. To use human resources as effectively as possible;

2. To ensure the best possible working relationships among all members of the organization;
and
 3. To assist individuals to reach their highest potential.

In Human Resource Management, there are four major areas:

1. Planning

2. Staffing

3. Employee development, and

4. Employee maintenance.

These four areas and any associated functions share a common aim. That is to have enough
competent employees with the skills, abilities, knowledge, and experience needed to achieve
further organizational objectives. Each human resource function (above) can be appointed to one
of the four areas of personnel responsibility but there are also other functions that are designed
for different purposes. For example, performance evaluation processes provide a stimulus and
guide employee development. They are valuable for salary administration purposes also. The
purpose of the compensation function is as a stimulus to keep valuable employees and also to
attract potential employees. Below is a description of the typical human resource functions
Human Resource Planning

The human resource planning function serves to determine the number and type of employees
needed to achieve the company’s goals. Research is performed in this function because planning
requires information to be collected and analyzed for the forecasting of human resource supplies
and the prediction of future human resource needs. Staffing and employee development are key
human resource planning strategies.

Job Analysis

Job analysis is deciding on the job description and the human requirements that are needed for
said job. The job description should include the skills and experience needed to perform the job.
A job description clearly sets out work duties and activities that employees will be expected to
perform. Job descriptions are essential because the information they provide to employees,
managers, and personnel people influences personnel programs and practices.

Staffing

Recruitment and selection of human resources (people) is what staffing is mostly concerned
with. Human resource planning and recruiting is done before selecting people for positions.
Recruiting is the personnel function of finding and hiring the best qualified applicants to fill job
vacancies.

The selection function is used to choose the most qualified applicants for hiring from those
attracted to the organization by the recruiting function. During the selection process, human
resource staff are involved in assisting managers to decide which applicants to select for the
given jobs and which ones to reject.

Orientation

Orientation is done in order to introduce a new employee to the new job and the employer. It is a
way for new employees to get to know more intimate aspects of their job, including pay and
benefits, working hours, and company policies and expectations.

Training and Development

Training and development is used as a means of providing employees with the skills and
knowledge to do their jobs well. It must be provided to all employees. In addition to providing
training for new or inexperienced employees, organizations often provide training for
experienced employees as well. This may be because their jobs are undergoing change or the
company needs them to work more effectively. Development programs are also done to equip
employees for higher level responsibilities. Training and development programs are ways of
making sure that employees can handle the stresses of their jobs and perform well.

Performance Appraisal

Performance appraisal is an evaluation of an employee and his/her performance to make sure that
said employee is working well and at acceptable levels. Human resource personnel are usually
responsible for developing appraisal systems. The actual assessment of employee performance is
done by supervisors and managers. Performance appraisal is necessary because the results of the
appraisal can be used to motivate and guide employees’ performance. It also provides a basis for
pay, promotions, and any disciplinary action if necessary.

Career Planning

Career planning is a process where an employee explores his/her interests and abilities and
strategically works towards job goals. It has come about partly because many employees’ feel
the need to grow in their jobs and to advance in their careers.

Compensation

It is the HR department that determines how much employees should be paid for certain jobs
using a system of assessment. Compensation costs companies a lot so it is something that needs
serious attention in the human resource planning stage. Compensation affects staffing because
people generally want to work for an organization that offers more pay in exchange for the work
done. It provides an important motivation for employees to achieve more in their jobs and reach
higher levels. As such, it is related to employee development.

Benefits

Work benefits are also referred to as fringe benefits. They are non-wage compensation that
employees get in addition to their usual wages. Benefits are legally required items but employers
can also more at their discretion. The cost of benefits is so high that they have become a huge
consideration in human

resources planning. Benefits are mostly related to the maintenance area because they provide for
many basic employee needs.

Labor Relations

Labor relations relates to the practice of managing employees who are members of a union.
Unions provide employees with strength in numbers and have representatives who can advocate
on their behalf if necessary, to deal with any discrepancies in pay, benefits, working conditions,
and other work aspects. HR personnel are responsible for negotiating with unions and resolving
any disputes.

Record-keeping

Record-keeping is essential and the most basic function of HR. Recording, maintaining and
retrieving employee information when needed is done by the HR personnel. The type of records
kept are related to the employees and include employment history, resumes, medical records,
promotions, transfers, working hours, and lateness, etc. Keeping records up-to-date is a vital HR
function. Employees today want to know what is in their personnel records and why certain
things are there or not there.

Personnel records provide the following:

a) Up-to-date information about employees.

b) Procedures for comparing employees and their work to other employees.

c) Procedures for recruiting new employees, e.g. by showing the rates of pay.

d) Record of previous action taken regarding employees.

e) Statistics which check and guide personnel policies.

f) Information regarding legal requirements and how to comply with them.

Personnel Research
Research activities are an essential function of HR personnel. Research is done with the aim of
obtaining personnel specific information in order to develop programs that work for an
organization. Planning and reviewing are vital. Areas, such as recruitment, employee turnover,
training, and terminations are all important areas to be researched. Employee opinions are also
very important and can be obtained through surveys about wages, promotions, welfare services,
conditions, job security and the like.

Even though research is so important, many companies neglect it because personnel people are
too busy dealing with other more immediate problems.

Research is not done to deal with problems but to prevent them from occurring in the first place.
The responsibility for research lies initially with the HR department but line supervisors and
executives at all levels of management should assist. Trade unions and other organizations can
give some assistance also and it should be made use of.

HR functions also include managing change, introducing new technology, innovation and
diversity. Regular social audits of HR functions are necessary because of the large role HR plays
within any organization. HR’s ultimate goal is to provide a link between the organization and the
employees because the organization needs employees’ commitment. Employees need to be made
aware of things like sales growth, restructuring plans, sharp price movements and any challenges
facing the country and their organization in particular. This can be done by videos, films, lectures
and booklets.

The main responsibilities of a human resource manager are:

– To fully develop knowledge of corporate culture, plans and policies.

– To initiate change where necessary and act as a facilitator.

– To actively participate in formulating company strategy.

– To be a consultant to change.

– To ensure communication remains open between the HR department and individuals and
groups inside and outside the organization.

– To identify and advance HR strategies that match the company’s business strategy.
– To develop particular organizational teams and assist in the effective working relationships
between the teams and individuals.

– To ensure the organization’s goals are achieved by effective co-operation of employees.

– To identify any problems, particularly in the HR area, and to find effective solutions.

– To contribute to the co-ordination and support services for HRD programs.

– To assess the effectiveness of HRD programs and to do research in order to find out how the
HRD has affected (improved or otherwise) individual or organizational performance.

Pat McLagan is an award-winning author, speaker and coach of leadership development and
management. She has identified nine new roles of HR.

1. To bring the issues and trends concerning an organization’s external and internal people
to the attention of decision-makers, and to recommend long-term strategies to support
organizational excellence and endurance.

2. To design and prepare HR systems and actions for implementation so that they can
produce maximum impact on organizational performance and development.

3. To facilitate the development and implementation of strategies for transforming one’s

own organization by pursuing values and visions.

4. To create the smoothest flow of products and services to customers; to ensure the best
and most flexible use of resources and competencies; and to create commitment among
the people who help us to meet customers’ needs whether those people work directly for
the organization or not.

5. To identify learning needs and then design and develop structured learning programs and
materials to help accelerate learning for individuals and groups.

6. To help individuals and groups work in new situations and to expand and change their
views so that people in power can participate in leadership.

7. To help people assess their competencies, values, and goals so that they can identify,
plan, and implement development actions.
 8. To assist individuals to add value in the workplace and to focus on the interventions and
interpersonal skills for helping people change and sustain change.

9. To assess HRD practices and programs and their impact and to communicate results so
that the organization and its people accelerate their change and development.

Accounting and Finance Department: Roles and Links with Other

Departments

What’s it: The accounting and finance department is concerned with planning, managing, and
controlling financial resources, including managing records and information related to business
finances. In addition, the department is responsible for ensuring effective and efficient financial
management to support the company in achieving its goals. This department also performs the
necessary financial controls to support all business activities.

What does the accounting and finance department do? Handling payroll, financial reporting, and
budgeting are examples. In addition, this department also takes care of accounts
receivable and payable, bookkeeping, legal compliance, and financial control.

In a small business, this department may not be a separate area but run in conjunction with other
functions. This is because they do not have the resources to support the function separately.

But, on the other hand, in large businesses, the accounting and finance departments are separate
areas. They have sufficient resources and can hire specialists. The team has specific duties and
jobs to oversee how the business maximizes and spends its money and takes steps to control its
finances.

What are the two main objectives of the accounting and finance departments?

The accounting and finance department plays an important role in a company. Those are key
areas besides operations, human resources, and marketing departments. In addition, this
department fulfills two main objectives within the company.

First, the department supports business planning and decision-making. For example,
management plans expansion by acquiring a company. The finance department people then
assess how feasible the acquisition is and how to finance it, whether using internal cash or
external sources such as issuing debt securities.

Second, the department provides financial information within the company. Such information
may be needed by other departments to operate effectively and efficiently.

The finance function does not only provide and monitor what happens internally, such as budget
and cost realization. But, the department also monitors external changes and analyzes their
impact on business finances. For example, the finance team evaluates securities
investments when the central bank raises interest rates. Thus, cash is invested in the right
instruments to meet liquidity while maximizing returns, reducing the opportunity cost of idle
funds.

Their roles include:

Financial Accounting. This role involves recording all financial transactions, usually through
a double-entry bookkeeping system, and preparing financial reports as required by management
and external stakeholders.

Budgeting. This department analyzes, allocates, and controls financial information to assist day-
to-day operations. At first, the team plans the budget for next year by mapping how much money
would come in and how much would be spent. Once implemented, the team monitors and
controls the budgeted items.

Payroll. The accounting and finance department prepares and processes salaries paid to
employees, then records transactions and makes reports. In addition, this role requires this
department to ensure the company’s payroll has complied with applicable rules and policies,
both internal and external such as the government.

Treasury and financial planning. This role relates to how to allocate existing funds within the
company. For example, the team manages liquidity and investment, including where the
company should place its cash, whether in bank deposits or securities. This role is to optimize
returns while meeting liquidity. In addition, the team also monitors the company’s debt and
equity to achieve an optimal capital structure.

Taxation. This role relates to preparing and paying taxes. The team is tasked not only with
managing and making tax reports. However, they also identify and record all transactions with
tax consequences, which are needed for taxation, decision-making, and financial planning. In
addition, the team is also responsible for ensuring money is available when needed to pay taxes
to the authorities.

How does the accounting and finance department affect the business?

The accounting and finance department ensures all financial records are accurate and up-to-date.
Thus, it reflects actual conditions. Such information is essential to support quality decisions.
Imagine if this department gave the wrong financial information to management; what would
happen? Bad decisions are the result.

In addition to providing input for management for decision-making, this department also
cooperates with other departments to support decision-making in related areas. Take the
marketing department as an example. The team in the accounting department works closely with
the marketing team to set the right price to maximize sales volume and profit.

The marketing team may focus on generating the highest possible sales volume and may
therefore focus on low prices. Meanwhile, the accounting and finance team brought other
information, especially related to costs, including production costs. Then, the two teams
formulate prices to meet sales and profits.

In addition to providing information to other departments, the finance function can also impact
other areas by advising on various financial matters. For example, the finance department might
suggest ways to improve cash flow. Or, the department provides insight on how to prepare a
budget, allocate a budget and maximize the budget, according to the context within each
department. Such suggestions are vital for a smooth operation. And in the end, it significantly
contributes to other departments meeting budgets and business plans.

Support business decisions

As mentioned, finance and accounting departments provide financial information to make

business decisions. The decisions may be related to the organization as a whole or specific to
other departments. Examples are:

Corporate action. Management needs relevant information when making decisions about
expansion. For example, which is the right choice to grow a business? Should the company
acquire, establish a subsidiary, add a new factory, or buy a new machine? Should the company
focus on the current market or enter a new market?

Such decisions require input from the finance department. For example, the accounting and
finance departments provide information about the financial resources available to support
expansion. In addition, the department also identifies potential external financing to finance
expansion if internal resources are insufficient. Then, the team is tasked with analyzing
costs, break-even points, and investment feasibility.

Marketing. For example, the finance department sets a budget for a marketing campaign, as
proposed by the marketing department. In addition, the finance team also monitors and controls
its realization, ensuring the budget is allocated optimally.
Then, post-campaign, the accounting and finance departments provided other valuable
information. For example, the department provides sales and profit realized information to
review whether the campaign was successful or not?

Human resources. The accounting and finance department provides relevant information to
support the human resources department in designing and evaluating related budgets, policies, or
strategies. For example, it may be related to turnover, employee productivity, hiring, and
training.

For example, costs in the resource department increase because employee turnover is high. As a
result, companies must frequently recruit and train new employees, which is more expensive
than retaining existing employees. This cost information will be input for reviewing and revising
related policies and strategies to reduce turnover.

Operation. The operations department is responsible for producing products and related areas
such as raw material procurement, inbound logistics, and warehousing. In addition, to produce
goods, they also need labor, machinery, and supporting equipment. It all costs money. And the
finance department allocates the required money according to the budget proposed by the
operations department.

The relationship is also the other way around. I mean, the operations department does need the
finance department to fund operations. But conversely, the finance department also depends on
the operations department to draft the budget.

For example, designing a budget for the organization as a whole requires revenue and cost
assumptions. And the finance department requires assuming production volumes and costs to
plan targeted revenues and profits.