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Evolved Dynamics of the Finance Vertical

By Anuj Aggarwal, Vice President & CFO, Canon India Pvt. Ltd.

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Anuj Aggarwal, Vice President & CFO, Canon India Pvt. Ltd.

The Finance vertical has always been an imperative part of the business. It is interesting to note that this important vertical has undergone considerable evolvement in the last few decades. Not only has the finance division evolved in terms of functional relevance, it has also witnessed expansion as the ‘name’ of the function. Moving from its original, ‘Accounts Department’ to popularly being termed the ‘Finance and Accounts Division’ or even ‘Business Finance, the function has undoubtedly progressed. As the evolution of name suggests, role and relevance has also undergone tremendous change in this period. In the earlier years, probably expectation from Accounts department was to settle payables and prepare P/L and Balance Sheets at the end of the financial year. Accounts department used to be back office and perhaps in few cases was not completely aware of the operations of the business and transactions were recorded as and when they used to occur. In other words, theirs was simply a recording and reporting function, with analysis involved at a minor extent.

With the change of time, complexities in the business began to grow, whether due to increasing regulations or expanding geographical reach of the business. Finance department in this evolution emerged as the natural partner of the CEO, supporting in navigating through complexities and difficulties. With business becoming more and more complex each day, it is unquestionably almost impossible for the CEO to run the business in silos. Support of insight and far sight is required to a great extent, to enable right decisions at the right time. This requirement led to the evolvement of ‘Accountants’ to ‘Business Finance Managers’. Today, they not only provide analysis on a historical basis, but also forecast opportunities and threats to the business. In addition to this natural evolution of the finance team, regulatory and tax requirement increased vastly by various governments, which resulted in further advancement of the finance team.

Finance team today stands equipped with the knowledge and insight of both the internal and external environment. Dealing with all the transactions undertaken by the other departments and recording them in the books of accounts, the Finance Division has access and knowledge of all important activities. Scrutiny and security of all the important information shared by other departments, becomes another important mandate of the Finance team. In addition to the information they possess about the various functions, they should continue to keep tab of the market environment, which would enable them to forecast business scenarios. This vital contribution by the finance people puts them into the position of one of the most important functions in an organization.

As mentioned above, by virtue of their job role and requirement, the Finance department holds considerable importance in the organization. However, it is up to individual Finance Heads and Managers how they utilize their position and contribute towards the growth of their organization. They can really uplift their functional roles to the next levels and move the ladder up from ‘Finance Managers’ to ‘Business Finance Managers’, with the right attitude towards cross functions and teams. They need to partner with other functions and understand and appreciate each other’s objectives and work and consider them mutual goals. They have all the necessary information required, they have all the skill sets required, however it is the application of these resources and skills that defines the journey from a ‘Finance Manager’ to a ‘Business Finance Manager’.

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