In the business world, knowing the function of financial administration is very important because it is directly related to company finances.
In addition to knowing the functions of financial administration, you also need to know the meaning, goals, tasks and other things related to financial administration.
So, if you want to know more about financial administration in a company, let’s look at the following reviews.
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Definition of Financial Administration
Knowing the meaning of financial administration is important because this is the initial foundation in understanding financial administration.
So, basically administration is an activity carried out with the aim of organizing, assisting, or serving an activity so that the purpose of the activity is achieved.
In addition, administration is also defined as an activity that a group of people carry out through a number of stages and is led by a leader using the right advice to achieve goals.
So, what is the meaning of financial administration?
In a broad sense, financial administration is a guideline that has a close relationship with the implementation and use of funds in an organization in order to produce the operational activities of the organization or company, including activities of financial planning, regulation, supervision and accountability.
Meanwhile, in simple terms financial administration is all activities related to data collection, recording, and expenses to fund all kinds of company operational activities.
Therefore, companies really need financial administration so that all their interests can be arranged according to plan.
If the administrative implementation can be faster, then the company will be the beneficiary.
Well, an important key in carrying out administrative activities properly and quickly is that everyone involved must work well together based on their respective duties and responsibilities.
Conversely, if the implementation of administration is slow, then the company will be the party that loses. In addition, the administrative process will be hampered.
To avoid this, using the principles of financial administration will greatly assist all development processes of a company.
Not only that, companies must also understand the system and organization of their business as a whole.
This is so that the business run by the company can run and develop according to expectations.
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Financial Administration Objectives
In addition to knowing the meaning of financial administration, you also need to know what the purpose of financial administration is.
Basically, the purpose of financial administration is to process and manage company finances with the aim that the company’s financial system runs well.
In this way, the correctness of the financial system can be accounted for in accordance with the applicable regulations.
Not only that, financial administration also aims to facilitate the entry and exit process of a company.
Furthermore, financial administration also aims to facilitate all of the company’s financial transaction activities .
This is because all financial transactions can be proven with accountable evidence.
Finally, financial administration also aims to make it easier for a financial manager to know how the financial condition of a company is.
Financial Administration Function
Now, after you know the meaning and purpose of financial administration, now is the time for you to know the functions of financial administration in a company, as follows.
1. Investment Function
The first financial administration function is as a container that companies use to store funds or company debits.
Then, the company’s funds or debit will be used to meet the company’s needs.
In general, there are two types of investment functions in financial administration, namely long term investment and short term investment.
Long Term Investment is the highest company asset that the company uses for the company’s needs in the future, such as production equipment, land, cash, and so on.
Short Term Investment is an asset owned by a company with a low value, so it runs out faster.
Examples of financial administration are inventory, accounts receivable, cash, and so on.
2. Shopping Function
The second financial administration function is the shopping function.
With this function, the financial administration section is tasked with making purchases or debiting a company for the needs of the company itself.
3. Profit Sharing Function
The profit sharing function is a financial administration function that is in charge of making and determining the rules in terms of sharing company profits.
4. Fundraising Function
The last financial administration function is the fundraising function.
Basically, this function aims to provide funds for companies to meet company needs, such as finding investors or sponsors.
Duties of a Financial Administration
After knowing what are the functions of financial administration, you also need to know the duties of a financial administration officer in a company.
Each financial administration officer or staff has specific duties and roles in a company, as explained below.
1. Make a Financial Plan
The first task of a financial administration staff is to make a company financial plan.
Basically, the financial plan includes aspects of income, structured and systematic loans, and payments.
You can make a financial plan by using references to financial reports from the previous period.
2. Make Financial Reports
Apart from making financial plans, the next function of financial administration is to make annual financial reports.
However, making financial reports can be made in stages, such as daily, weekly, up to yearly.
This can be made based on the flow of cash inflows, debts, outflows, and so on.
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3. Manage Cash
The next task of the financial administration staff is to manage cash.
In general, the responsibility for managing cash is the responsibility of financial management .
So, what are the tasks involved in cash management?
For example, their duties include reporting withdrawals of deposits or funds, determining the amount of deposited funds, opening an account, and recording all transactions related to the company’s cash.
4. Manage Credit or Loans
The next task of the financial administration staff is to manage company loans or credit.
In general, this relates to payments and billing such as company debts. An example is the recording of a credit note .
Financial Administration Officer
Maybe you are wondering who are the financial administration officers in an organization or company.
So, here are the financial administration officers that you need to know.
1. Secretary
The first financial administration officer is the secretary. The secretary’s job is to be responsible for the company’s financial activities with the bank.
In addition, the secretary is also tasked with carrying out accounting for donations of funds or taxes on company owners.
Other secretarial financial duties include handling petty cash and providing costs for routine activities with small capital.
2. Treasurer
The next financial administration officer is the treasurer. Then, what are the duties of the company treasurer?
The task of a treasurer is to be responsible for managing financial accounting with accounting software by receiving all cash applications, both petty cash and petty cash accounting reports that come from the company admin.
3. Finance Manager
The last financial administration officer is the financial manager whose job is to receive and examine financial reports for petty cash generated from financial report applications .
Thus a review of the function of financial administration and other questions about financial administration that you need to know. Hopefully this article is useful for you.