Finance is a comprehensive term used to describe activities associated with banking, leverage or debt, credit, capital markets, money, and investments. Basically, finance represents money management and the process of acquiring the needed funds for certain people and certain businesses to operate. Finance also encompasses the study of money, banking, credit, investments, assets, and liabilities that make up financial systems.

Finance has three main subcategories namely: personal finance, corporate finance, and public or the government finance. Each has its own distinctive part as to why finance in the world is the way it is right now than the previous years. Consecutively, each subcategory is essential to the recognition of finance worldwide.

Three Types of Finance

Because individuals, businesses, and government entities all need ample funding to fully operate and run as smoothly as possible, the finance field includes three main subcategories: personal finance, corporate finance, and public/government finance.

Personal finance

Financial planning involves analyzing the current financial position of individuals to formulate strategies for future necessities within financial constraints. Personal finance is specific to an individual’s financial situation and activity. Therefore, financial strategies depend largely on the person’s earnings, living requirements, goals, and desires. Individuals must save for retirement, for example, which requires saving or investing enough money during their working lives to fund their long-term plans.

Personal finance includes the purchasing of financial products such as credit cards, insurance, mortgages, and various types of investments. Banking is also considered a component of personal finance because individuals use checking and savings accounts as well as online or mobile payment services such as PayPal and Venmo.

Corporate finance

Corporate finance refers to the financial activities related to running a corporation, usually with a division or department set up to oversee those financial activities.

In other cases, a company might be trying to budget its capital and decide which projects to finance and which to put on hold in order to grow the company. All these types of decisions fall under corporate finance.

Public finance

Public finance includes taxing, spending, budgeting, and debt-issuance policies that affect how a government pays for the services it provides to the public.

The presidential government that the Philippines has helps prevent market failure by overseeing the allocation of resources, the distribution of income, and economic stability. Regular funding is secured mostly through taxation. Borrowing from banks, insurance companies, and other nations also helps finance government spending.

In addition to managing money in day-to-day operations, a government body also has social and fiscal responsibilities. A government is expected to ensure adequate social programs for its taxpaying citizens and to maintain a stable economy so that people can save and their money will be safe

Financial Services

Financial services are the processes by which consumers and businesses acquire financial goods. One straightforward example is the financial service offered by a payment system provider when it accepts and transfers funds between payers and recipients. This includes accounts settled via checks, credit and debit cards, and electronic funds transfers.

Financial services are not the same as financial goods. Financial goods are products, such as mortgages, stocks, bonds, and insurance policies; financial services are tasks—for example, the investment advice and management a financial advisor provides for a client.

The financial services sector is one of the most important segments of the economy. It drives a nation’s economy, providing the free flow of capital and liquidity in the marketplace. It is made up of a variety of financial firms, including banks, investment houses, finance companies, insurance companies, lenders, accounting services, and real estate brokers.

When this sector and a country’s economy are strong, consumer confidence and purchasing power rise. When the financial services sector fails, it can drag down the economy and lead to a recession.

Financial Activities

Financial activities are the initiatives and transactions that businesses, governments, and individuals undertake as they seek to further their economic goals. They are activities that involve the inflow or outflow of money. Examples include buying and selling products (or assets), issuing stocks, initiating loans, and maintaining accounts.

When a company sells shares and makes debt repayments, these are both financial activities. Similarly, individuals and governments are involved in financial activities, such as taking out loans and levying taxes, which further specific monetary objectives.

The Finance Department is the part of an organization that is responsible for acquiring funds for the firm, managing funds within the organization and planning for the expenditure of funds on various assets. It is the part of an organization that ensures efficient financial management and financial control necessary to support all business activities.

Roles and Responsibilities of a Finance Department

The contributions of finance department to any company and how these contributions positively affect organizational performance will greatly depend on factors such as the extent to which the owner/ manager is involved in his company. The roles and responsibilities of a finance department include but are not limited to:

a. Management of company’s cash flow

It is the duty of the finance department to manage all cash flows into and out of a company and ensure that there are enough funds available to meet the day-to-day running of the company. This area also encompasses the credit and collections policies for the company’s customers, to ensure that vendors and creditors are paid correctly and on time; and that the company is also paid correctly and as when due.

b. Budgets and forecasting

In this function, the finance department works with managers to prepare the company’s budgets and forecasts and also give feedback with regards to the financial standing of the company. This information can be used to fulfil the cash needs of each department, plan company staffing levels, plan asset purchase and expansions at minimum cost before they become necessary. The finance department can also use past records from respective departments to make better budget and forecast over long-term and short-term time horizons.

c. Management of Taxes

Running a company involves paying tax, and it is the duty of the finance department to handle tax issues. This includes creating good corporate relationships with government by remitting PAYE (Pay As You Earn) to the relevant authority, and ensuring that implementation of tax matters are done within the framed policies.

d. Financial Reporting and analysis

Financial reporting and analysis is the function that takes raw accounting entries and transforms them into meaningful, usable and comparable financial statements. The finance department contributes to organizational growth by measuring and reporting on regular bases, key numbers that are vital to the success of the company. 

The finance department is also responsible for management of the organization’s cashflow and ensuring there are enough funds available to meet the day-to-day payments. This area also encompasses the credit and collections policies for the company’s customers, to ensure the organization is paid on time, and that there is a payment policy for the company’s suppliers. In most organizations there will be some form of forecast prepared on a regular basis to systematically calculate the ongoing cash needs.

Where there are cash needs beyond the day to day working capital, the finance department is responsible for advising and sourcing longer term financing. Financing may be obtained though bank or private lender debt or, in applicable firms, share issues to private investors. 

For the company, the main function of the finance department is to give high quality services and control the corporation’s financial necessities. The department’s duties also include documentation of financial accounts, tracking of expenses, taking charge in creating tax documents, settling bills, invoicing clients, and handling payroll. Furthermore, the finance department oversees all financial needs of the corporation and provides timely solutions to problems if the processes encounter some.

The finance department works hand in hand with the human resource department to perfectly demonstrate how payroll works. Payroll cannot be implemented by the human resource department without the help of the finance department for they are the ones who will secure the funds to be given to the employees every 10th and 25th of the month.

Basically, all money related matters fall on the responsibilities of the finance department.

The finance department’s members are divided into roles, each has a certain task to adhere and uphold to. The roles of the finance department include:

1. Finance Manager

The roles of the finance manager are as follows:

  • Ensures there’s no delay in the payment of payables.
  • Certifies that there’s no penalties in accordance to government rulings.
  • Establishes and explains the recurring tasks inside and outside Strategy X.
  • Checks and top-ups RFIDs for the CEO and IM department.
  • Follows up the clients for the overdue invoices.
  • Meets with the staff about their current ideas and problems.
  • Updates the back office staff in filing documents to Sharepoint.
  • Downloads and encodes billings from the Microsoft portal.
  • Audits AR SOP for compliance.
  • Generates bank statements and sends them to the bookkeeper.
  • Responds to the errors found by external auditor during audits.
  • Generates government remittance.
  • Creates invoices for the Managed Services or the Back Office department.
  • Generates overtime from Sprout.


2. Finance Assistant


The responsibilities of the finance assistant are as follows:

  • Assists in the month end reporting procedures.
  • Processes account payables, codes, and monitors delayed payments of bills. including analysis of its discrepancies.
  • Checks, verifies, and processes bills.
  • Performs filing and general administrative tasks.
  • Performs all necessary accounts, banks, and other reconciliations.
  • Maintains vendor files.
  • Participates in training sessions which will help improve and reinforce. harnessed knowledge and skills.
  • Handles multi-task stuff such as taking on several issues at once.
  • Establishes and explains recurring tasks inside and outside of Strategy X.
  • Checks and downloads bills from telecoms within the country and encodes them to Xero.
  • Updates the employees’ additional/new loan in Sharepoint for the salary loan report.
  • Encodes all bills in Xero and have them approved by the CEO every Wednesday.
  • Uploads the approved vouchers for disbursement to to BizLink.
  • Sends emails to the CEO for the weekly disbursements.
  • Encodes data to data entry (from BIR) for the VAT report.
  • Saves the 2303 form from the suppliers to Sharepoint shared folder with the sales team/purchaser.


3. Bookkeeper


The duties of the bookkeeper are as follows:

  • Assists in the month-end reporting procedures.
  • Chases clients for their overdue accounts, codes/recodes and monitors the aging of AR.
  • Checks, verifies, and processes bills.
  • Performs filing and general administrative tasks.
  • Performs all necessary accounts, banks, and other reconciliations.
  • Maintains vendor files.
  • Participates in training sessions which will help improve and reinforce harnessed knowledge and skills.
  • Handles multi-task stuff such as taking on several issues at once.
  • Establishes and explains recurring tasks inside and outside of Strategy X.
  • Follows up clients for their overdue invoices.
  • Uploads credit card transactions to Xero.
  • Updates the employee’s deduction in Sharepoint for the salary loan report.
  • Top-ups prepaid load for the employees.
  • Creates and bills shared expenses with TBOS/HOIT.
  • Saves bank statements to the shared files folder of the finance department.
  • Helps in the reconciliation of bank transactions.
  • Checks codes in Xero for data entry accuracy.
  • Saves the 2303 form from the clients to the Sharepoint shared folder with the sales team.
  • Generates payroll and uploads them to BizLink.
  • Emails the CEO for the final payroll distribution.