THEINANCE F FUNCTION: A FRAMEWORK FOR ANALySIS

THE FINANCE FUNCTION: A FRAMEWORK FOR ANALYSIS

FINANCE DIRECTION INITIATIVE

BUSINESS WITH CONFIDENCE

fmfac

The Finance Function: A Framework for Analysis forms part of the FinanceDirection thought leadership programme of the ICAEW Finance and Management Faculty. Building effective finance functions is a key concern of organisations and finance professionals. This report provides a foundation for considering the key challenges involved and a reference source for those analysing or researching the role of the finance function. ICAEW's Finance and Management Faculty provides its members with up-to-date business ideas; the latest management tools; unbiased and independent information and helps them to become an effective part of the management team. Membership is open to finance professionals with an interest in financial management. Further details are available at fmfac. We welcome comments and enquiries on this report. To contact us please email rick.payne@. Additional copies of this report can be downloaded from financedirection, where further information on our work is also available. September 2011

? ICAEW 2011 Dissemination of the contents of this report is encouraged. Please give full acknowledgement of source when reproducing extracts in other published works. No responsibility for any persons acting or refraining from acting as a result of any material in this paper can be accepted by ICAEW or the authors. ISBN 978-0-85760-285-5

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THE FINANCE FUNCTION FRAMEWORK ? FIGURE 1

USING THE FOLD-OUT DIAGRAM

Section 1 of this report provides an overview of the framework shown in Figure 1, overleaf. The references in Figure 1 correspond to the numbering structure of the report in Sections 2,3,4 and 6. They can be used to navigate to greater detail for each element of the framework.

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FIGURE 1. A FRAMEWORK OF FINANCE ACTIVITIES AND THE DRIVERS WHICH SHAPE THEIR IMPLEMENTATION

ENVIRONMENTAL DRIVERS

? Political and social 6.1.1 ? Market 6.1.2 ? Location 6.1.3 ? IT 6.1.4 ? Sector 6.1.5

Inform Influence/direct

ACCOUNTING DRIVERS

? Representation 6.2.1 ? Techniques 6.2.2 ? Regulation 6.2.3 ? Professionalisation 6.2.4

FINANCE ACTIVITIES

Strategy and Risk 2.4 and 4.4

3.9

Organisational Activities

3.8

Management

and Control

3.6

2.3 and 4.3

3.3

Accounting 2.1 and 4.1

3.1

Funding 3.10 2.5 and 4.5

3.7 3.5

3.4

Compliance 2.2 and 4.2

3.2

ORGANISATIONAL DRIVERS

? Ownership 6.3.1 ? Size 6.3.2 ? Strategy 6.3.3 ? Structure 6.3.4 ? People 6.3.5 ? Culture 6.3.6 ? Routines 6.3.7

THE FINANCE FUNCTION: a framework for analysis

finance Direction initiative

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