GCSE OCR Business

• The finance function in businesses has two main purposes:
• Provide financial information that other business functions require to operate effectively and efficiently
• Support business planning and decision-making
• Smaller businesses usually do not have the resources for a separate finance function
• Larger businesses can afford specialists to oversee how the business spends money and controls finances
• The finance function monitors internal and external changes that impact the business finances
• One important role of the finance function is to ensure accurate and up-to-date financial records
• Common forms of financial information include:
• Costs: knowing how much the business pays suppliers and if costs are controlled
• Revenue: knowing how much money the business generates and if it's increasing or decreasing
• Cash flow: monitoring and forecasting the amount of cash in the business
• Break-even point: knowing when the business starts to make a profit
• Profit and loss: determining if the business is making a profit or loss
• Business performance: measuring the performance of the business to inform future decisions
• The finance function influences business activity by providing essential financial information