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have to wait
for tasks to be carried out. 
(b) 
There is a 
reliance on head office
as local offices are less self-sufficient. 
(c) 
A system fault or hold-up at head office will 
impact across the organisation
. 
1.7 The finance function 
In many companies, the finance function is one of the most important expert roles in the organisation. 
Note that Chapter 8 also looks at the role of the finance function in the context of the 
specific role
of 
accounting in the organisation. 
Role 

Raising money
, ensuring it is available for those who need it 

Recording and controlling
what happens to money, eg payroll and credit control 

Providing 
information to managers 
to help them make decisions 

Reporting
to stakeholders, such as shareholders and tax authorities 
1.7.1 The importance of finance and finance management 
A distinction can be made between 'financial management' and 'management of finance'. 
(a)
 
Financial management
(i) Investment 
decisions 
(ii) 
Financing decisions (how to pay for investments) 
(iii) 
Dividend decisions (how much to give to shareholders) 
(iv) 
Operating decisions that affect profits (such as decisions on cost reductions or price 
increases). 
(b) 
Management of finance 
is the responsibility for the handling of cash, invoices and other financial 
documents and for recording the affairs of the business in the books of account. 
1.7.2 Raising money: sources of finance 
A company might raise new funds from the following sources, using the expertise in its treasury 
department if it has one. 
(a) 
The capital markets
, such as the Stock Exchange or the Alternative Investment Market,
 
are 
markets for trading 
long-term 
financial instruments such as equities and debentures. Companies 
will go to them for three services. 
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