Difference between Role of financial officer and accountant with regard to Financial Corporate Administration
Organization Chart of the Financial Management
The main finance executive works straight under the president or the pull offing manager of the company. Besides everyday web, the individual in charge keeps the Board of Directors informed about all the stages of concern activity, including economic sciences, societal and political developments impacting the concern behaviour. He besides furnishes information about the fiscal position of the company by reexamining it from clip to clip. The main finance executive may hold many officers under him to transport out his map. Broadly his maps are divided into two types:
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Treasury map
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Control maps
An exemplifying organisation chart of finance map of direction in a large organisation is shown below:
Organization of the Financial Management Function
Role of Treasurer
The chief function of Treasurer is that he refers to the fiscal officer and so looks at the undertaking of funding and its related activities. Treasury ever deals with liquid assets and so the chief function of financial officer is to look at the hard currency and its other liquid assets.
Some of import undertakings of Treasurer are as follows:
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He explicate the whole capital construction of the organisation in conformity to ends of the organisation and so to implement it to the organisation.
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He besides manages the sum of liquid assets and all type of hard currency.
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He fundamentally acts as a teller.
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He plays the function of an authorization signer on payment checks including the authorization to O.K. such checks.
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Reconciliation in bank histories.
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He manages the overall recognition map of the house.
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He besides has the authorization to use the excess hard currency of the company whenever there is any type of short term good investings.
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He besides makes the companies policies harmonizing to determination on trade price reductions and vendor payment.
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He besides maintains relationships with bankers and sellers.
All of the above mentioned maps of financial officer are implemented with the aid of hard currency trough, finance director and recognition director.
Role of accountant
As we have already seen that the financial officer trades with liquid assets, the accountant of the organisation has to enter the minutess of these liquid assets. It is the combined and effectual working of both the sections that give rise to an effectual system of internal controls. Controller is a fiscal officer responsible for accounting and control.
He does the undermentioned maps:
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Records all the minutess in the general leger, the histories receivables and the histories payables, sub-ledger, dealing with regard to fixed assets such as depreciation, stock list control, etc.
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He looks into the facets of revenue enhancements and insurance.
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He besides keeps path of company ‘s short term investings by entering and accommodating the dealing with those of the securities firm houses.
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He carefully looks into the regulative facets and execution of the company ‘s policy on trade price reductions and recievables aging.
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He ever acts as the planning manager.
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He keeps a record of the attending of the employees, their motion timings so as to ease in fixing the paysheet.
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He reports information to the direction.
The office carrier who assists the accountant in carry throughing the above undertakings is: revenue enhancement director, informations processing director, cost accounting director and accounting director. Thus the maps of fiscal accounting, internal audit, revenue enhancement, direction accountings and control, budget-planning and control are accomplished in this mode.
Controller ‘s and Treasurer ‘s maps in the Indian Context
The accountant and the financial officer are basically American footings. Basically the American form of spliting the fiscal executive ‘s maps is non being widely followed in India. We do hold a figure of transcripts holding officers with the appellation of the accountant. The accountant or the fiscal accountant in India, by and big performs the map of a main comptroller or direction comptroller. The officer with the rubric of financial officer can besides be found in a few companies in India.
The controllership maps can turn out to be utile under the Indian context, but soon some of these responsibilities are performed by the company secretary in India. His responsibilities, for illustration includes plus control and protection, keeping records and fixing studies and authorities coverage. The economic assessment map is by and large performed at the top degree in India. Some other maps, such as internal audit, can be brought within the crease of the controllership maps, if this construct is developed in the Indian context.
It should be realized that the fiscal accountant does non command fundss ; he or she develops, utilizations and construe information- some of which will be fiscal – for direction control and planning. For this ground, the fiscal accountant may merely be called as accountant. Management of finance or money is a separate and of import activity. Traditionally, the comptrollers have been involved in pull offing money in India. But the difference in pull offing money resources should be appreciated.
In the American concern, the direction of finance is treated as a separate activity and is being performed by the financial officer. The rubric of financial officer has non found favour in India to the extent the accountant has. Some of the maps performed by the financial officer in the American context are once more discharged by the company secretary in India. Insurance coverage is an illustration in this respect. The map of keeping dealingss with investors may now presume significance in India because of the development in the Indian capital markets and the increasing consciousness among investors.
The general rubric, fiscal director, seems to more popular in India. This rubric is besides better than the rubric of financial officer since it conveys the maps involved. The chief map of the fiscal director in India should be the direction ‘s of company ‘s financess. The fiscal responsibilities may frequently be combined with others. But the significance of non uniting the fiscal director ‘s responsibilities with others should be realized. The managing of funds- a really valuable resource- is a concern activity necessitating extraordinary accomplishment on the portion of fiscal director. He should guarantee the optimal usage of money under assorted restraints. He should, hence be allowed to give his full energy and clip in pull offing the money resources merely.
Functions of Treasurer and the Controller
CASE STUDY
The function of the corporate financial officers has changed from a traditional one of procuring financess and pull offing fiscal hazard to a strategic one of driving overall concern enterprises. In this new function, hoarded wealths have the premier duty of recommending better corporate administration rules in the company, both as a agency to better the stockholder value and to heighten investor assurance. This has become really of import because the corporate administration patterns of the companies are being placed under heavy examination from the regulators and investors following disclosures of corporate malfeasance, misrepresentation and fraud. This article discusses the function of the financial officers in constructing a sound administration construction in the companies.
Description
The fiasco in Satyam Computers Limited, India ‘s 4th largest package company, has brought the issue of corporate administration in spotlight more peculiarly in India. It is nevertheless unfortunate that such of import issues gain prominence merely after incidents of corporate frauds. The issue of corporate administration was earlier debated when the developments at Enron and WorldCom rocked the universe.
As India is on a growing flight and is holding aspirations of being ranked in the counters of the developed economic systems, the issue of corporate administration merely being surfaced after the Satyam cozenage is a sedate concern. We may claim that the Satyam cozenage is an stray instance in corporate India, but it is more of import to see how the remainder of universe assesses our earnestness towards the moralss of corporate administration. Do we take the moralss of corporate administration earnestly and profoundly and float it off from its cosmetic value to run an endeavor towards the chief end for which the corporate administration term was coined? Largely the pattern is to adorn the board, which is at the helm of personal businesss of corporate administration, with people whom the boosters of the company believe will add some cosmetic value to the endeavor. Many a times the boosters induct known people onto the board. Having said that companies prefer the cosmetic value of the board over its usefulness. Therefore one can easy reason that the Satyam debacle is nil but a true contemplation of what routinely and pervasively base on ballss for corporate administration.
The function of financial officer is important to today ‘s concern particularly in guaranting that the company has the hard currency that it needs to run the concern, adequate hazard direction systems are in topographic point and eventually guaranting that the company complies with the assorted international criterions. The financial officer and hard currency have a akin relationship and the recent debacle of Satyam Computers reveals a narrative of syphoning the hard currency from the company ‘s balance sheet which puts the function of the financial officer or CFO nil but on doubtful differentiation. By the mere definition of a financial officer one understands that wherever there is hard currency in the company, the financial officer has to be present at that place. Though the Satyam fraud appears to be a systemic fraud by the senior direction, however such frauds can be mitigated to some extent if corporate administration is compiled by the financial officer. In such a scenario it becomes wholly more of import for corporate financial officers to revisit the rudimentss of corporate administration and their function in instilling the rules of corporate administration in a company. This article high spots and revisits the function played by the financial officers or CFO in the conformity of corporate administration.
Treasurer in Detail
The Treasurer ‘s function is the 2nd most of import map on the Board after that of the Chair. Financial answerability is cardinal to not-for-profit administrations. If your members have no assurance in your ability to command and account for fundss, they will hold no assurance in the administration as a whole.
The Treasurer may happen a reluctance amongst non-financially trained board members to take any duty for finance. As a Board or regulating commission nevertheless, the group as a whole has to portion duty and decision-making and it will hence be an of import portion of the Treasurer ‘s function to guarantee that others understand the information that is being presented and the deductions thereof. It is peculiarly of import that the Treasurer attends meetings on a regular basis in order that others can inquire inquiries and be certain that they have a full apprehension of the association ‘s fiscal place.
Aim
To pull off and describe on the association ‘s fundss.
Duties
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To transport out the duties of a member of the Board of Directors.
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To take budget planning and readyings.
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To supervise the budget and inform the Board as to whether projections are turning out every bit predicted in order that joint determinations can be made on appropriate accommodations.
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To guarantee the Board ‘s fiscal policies are being followed.
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To describe to the Board of Directors and the general rank on fundss.
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To fix any needed fiscal coverage signifiers.
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To guarantee revenue enhancement ordinances are complied with VAT.
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To pull off and keep bank histories, guaranting the association is acquiring the best rate of return for financess held and traveling money between histories as
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To supervise all fiscal minutess.
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To subscribe checks ( with a 2nd signer from the Board or staff ) .
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To chair finance sub-committee, if one exists.
Treasurer WORKING WITH A BOOKKEEPER.
Most hoarded wealths do non hold bookkeeping expertness, and they need non – and ideally should non – pass their clip on daily fiscal disposal. Wherever possible, a appropriately experienced/qualified paid ( or voluntary ) bookkeeper should be responsible for banking, for treating payments, for maintaining full and accurate histories of all grosss and outgo and for bring forthing fiscal studies.
This leaves the Treasurer ‘s clip for the more strategic and managerial facets of the function, in peculiar budgeting and planning. The Treasurer does nevertheless necessitate to supervise the work of the bookkeeper as ultimate duty for the truth of records prevarications with his or her function.
If your association needs to subject formal one-year statements to revenue enhancement or other authorities governments, these may be prepared by your bookkeeper or by external comptrollers. Requirements will change in different states. In the UK, all limited companies must hold their concluding histories prepared by a hired comptroller.
Becoming a Good Treasurer
A financial officer does non hold to analyze accounting or concern in order to make good at this place.
A good financial officer will be characterized by the undermentioned traits:
1.Honesty and Integrity:As financial officer you are non given free autonomy to make whatever you like. Rather, you are accountable to God, the family and the commission. Therefore, execute your undertaking decently and professionally.
2.Caution:This feature will assist you keep accurate and up-to-date records. Be careful to enter all minutess. Be careful when managing money because finally this money belongs to God.
3.Common sense:Common sense is necessary in order to catch mistakes early.
4.Open books:It is good to keep an unfastened book policy refering fiscal affairs. Any member of the family, after audience with the commission, should be able to see the fiscal province of the family. This will assist construct answerability and credibleness for the full family.
5.Alert oculus:The financial officer needs to be argus-eyed in tracking income and disbursals. These sums should be compared with the current budget.
6.Fidelity to God:Ultimately, the financial officer brings award to God by the proper exercising of his/her undertaking. Therefore, see your place of financial officer as a manner to demo your fidelity to God. Here ‘s an first-class axiom: God ‘s work done in God ‘s clip will have God ‘s proviso.
Controller Vs Treasurer
While the term Controller is used otherwise in Sweden than in America, there is ground for a clear account of the differences between Controller and Treasurer. The fact that a Controller in Sweden has a broader function than the Controller in America can be explained mostly by the map of the financial officer that has those responsibilities overlapping those of the Swedish Controller.
In big houses, the fiscal operations overseen by the CFO will divide into two subdivisions, with one headed by the financial officer and the other by the accountant. The Controller ‘s duty are chiefly accounting in nature. Costss accounting every bit good as budgets and forecast refering internal ingestions, lies within the country of the Controller.
The financial officer ‘s duty autumn into the determination countries most normally associated with fiscal direction, put funding and plus direction. The organisation chart may give you false feeling that a clear splits exists between accountant and financial officer duties. In a well-functioning house, information will flux easy back and Forth between both subdivisions. In little houses the financial officer and accountant maps may be combined into one place with a ensuing commingling of activities.
Traditionally the function of accountant has been that of a figure cruncher, calculating fiscal informations in order to fix studies. The assignment associated with the accountant function is in no manner set in rock, different organisations have different responsibilities attached to the Controller.
The concluding statement where the accountant should be seen as a long scope developer of executives, intimations at a outstanding function when it comes to developing human resources within organisations. In order for the accountant ‘s section to go developers of accounting and runing executives they have to hold an intimate relation to the forces of the organisation.
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