Many people gain knowledge of financial concepts as kids. When parents ask their children to do chores in exchange for an “allowance,” this monetary transaction creates an elementary perception of finance. Fast forward 20 years, and you’ve traded chores for your own business. Now, you find yourself relying on another kind of fiscal entity: business finance. While business finance still takes care of your “allowance,” they serve many other essential functions that can help your company realize growth.
Every business has a bottom-line because every business has organizational goals. Business finance helps companies define their financial objectives so that they can determine the bottom-line for success. By setting financial goals, a company will know whether they’ve reached the threshold of profitability, or if they are remaining stagnant. According to a June 2005 article in “Business Finance Magazine,” Chief Financial Officers, who oversee business finance operations, are growing more involved with strategic planning efforts. The reason is that without well designed strategic plans, companies might not have the knowhow to achieve profitability. Because financial strategies tie back to the company’s goals, business finance is tasked with the responsibility of making sure the company has a way of meeting their bottom-line.