Essay Example on Business Basics: HR, Accounting & Finances

Just like a healthy body relies on different functional organs performing specialized functions, a thriving business consists of functional areas which take care of varying domains. These areas group tasks and skills to manage business aspects within their protocols and logic. Human resources and accounting and finances are among the most fundamental areas shared across virtually across all the businesses. The three functions combine to bring the company to its basic level of operation. Extensions like information technology and legal support come handy in the later stages of a company's growth. It's essential, therefore, that companies ensure they begin on a firm footing with elaborate human resources, accounts, and finance structures in place.

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Any business that does not run as a one-person management unit calls for some level of human resources work. A company's human resource functional area requires a dedicated effort to manage the workforce and advance the policies of a company (Kalpana, 2020). Alternatively, one can take charge of one's company, doing the hiring and firing to manage one's workforce as a close-knit group. Whether formally organized or informally done, your human resource systems require that you strive to achieve consistency and clarity in communicating the company's goals and policies to your staff. Also, have a way of showing your staff that you value their contributions to boost their morale and goodwill. Human resource today goes beyond the classic hiring and firing understanding. It includes every aspect of people's management and is at the core of establishing a positive organizational culture. It's this positive business culture that drives employee engagement, staff retention, job satisfaction, and overall business performance. Building such a culture requires a multi-pronged approach with consistency in nurturing. Essentially, setting the right tone is the most significant contribution of the human resource arm to the company's culture.

As for accounting, accountants work closely with managers providing them with hands-on information necessary for sound decisions regarding the allocation of a company's resources. The accounting arm is ultimately responsible for an accurate representation of the company's financial transactions within and outside the company, with investors or government agencies. Financial accountants have the basic responsibility of preparing financial statements to enable both the inside and outside entities to assess the financial ability of the company accurately. Information on performance and appraisal, budgets and costs, and asset allocation fall under the docket of managerial accountants. Such information is crucial in the management's decision-making process. The company's financial records are vital indicators of operations and the financial standing of a business. Management relies on this to understand how the business is performing (Kalpana, 2020). Budgeting and forecasts, which can critically impact a business, are also at the core of accounting. Projection and business trends rely on the historical financial data and help your business to remain on the profiting end. Financial data is thus handier when funneled through a well-structured accounting system.

Finance, on the other hand, is closely related to accounting. A business is far from functional without money. It makes it necessary for every company to specify some way of controlling its finances. Such involves understanding cash flow, striving to make the best use of limited financial resources, and appropriate strategizing. Financial functions, therefore, include planning for, sourcing and managing a company's finances' finance managers tasked with planning for both short-term and long-term need for financial capital, and analyzing the likely impact of borrowing on the economic structure of the business. The finance department of a company addresses questions about how to obtain funds, the long-term cost of loans, and the impact of different financial decisions on the long-term well-being of the business. The business goal met where an effective financial management system exists. Financial planning, which is an essential element of a thriving business, can only be achieved in the light of effective financial management. Financial management entails sourcing of required funds to meet the business concern. Fund acquisition is a significant calling in financial management docket. It involves settling for a possible source of the fund at a minimum cost. Proper allocation and maximum utilization of funds greatly improve the operational efficiency of a company. It substantially reduces the cost of capital and, in the process, enhances the value of a company. Managing funds remains one of the most crucial considerations for investors, owners, and business managers. They have a responsibility to examine the potential impact of their management decisions on the profitability of the business, cash flow, and the overall standing of the business. Any activity influencing a given aspect of business will impact the financial performance of a company. These activities must be evaluated and manned by management.

Conclusion

In conclusion, as your business progresses, it's a sound strategy to assign specific operations to particular individuals to streamline functions, prevent errors, reduce costs, and enhance performance. Many businesses begin on a fundamental functional framework and later split certain functions as they grow (Kalpana, 2020). Human resources as the heart of the business and accounting and finance as the lifeblood combine to get the company to its underlying operational level. Without these functions, the company will hardly run. The two essential responsibilities of accounting and finance are addressing the money in issues (accounts receivables) and money out issues (accounts payable). It is by linking them to the human resource function, accounts, and finance also take care of the payroll issues, ensuring that the employees' pay is accurate and prompt.

Reference

Kalpana, R. (2020). 5 Main Functional Areas of Management | Business Management. Retrieved 12 February 2020, from https://www.businessmanagementideas.com/management/5-main-functional-areas-of-management-business-management/512