Finance, Accounting, and a Company’s Financial Viability
Both finance and accounting are crucial to the success of any organization. Upon first glance they seem to have the same function within a company but that is absolutely not true. Accounting and finance are related but they have different meanings and different functions in any organization. Financial affairs is deeply imbedded within decision making, accounting is for the financial actions within a company, and the two together is the base to determine an organizations financial viability. One can start by addressing the fact that financing is needed to build any business, health care or otherwise. While it is needed to build a business, continuous growth in finances is the chief goal of any investor. Together, investors, contributors, and financial managers take a look at the business from an inside and panoramic view. Moreover, they work together to build assets and make vital financial decisions concerning the outlook of the company (Cleverly & Song, 2011). In order to do this the accounting system is put in place to house the business’s financial information. The accounting department falls under the umbrella of the business’s finances. Investors, contributors, and financial managers use the accounting system as an asset to build the success of their business. This system of accounting collects financial information to prepare and disseminate quantitative financial data within a business (Horst, 2012). The relationship between finance and accounting come together where the financial branch of accounting provide financial statements like balance sheets, statement of operations, statement of cash flows, and statement of changes in net assets to the decision makers of the company. These statements present a picture of the immediate financial situation of an organization and how it got to this point over a period of time (Cleverly & Song, 2011). The accounting department is used...
References: Cleverley, W. O., Song, P. H., & Cleverley, J. O. (2011). Essentials of health care finance (7th ed.). Sudbury, MA: Jones & Bartlett.
Horst, B. CPA, CMA (2012) Costing for Profitability. Importance of Reporting Variances Appropriately. http://costingblog.wvco.com/2012/03/08/importance-of-reporting-variances-appropriately/
Needleman, Jack. (2003). Assessing the Financial Health of Hospitals. Agency for Healthcare Research and Quality. Retrieved from http://archive.ahrq.gov/data/safetynet/needleman.htm
Jana Kajanová (2006) The Relationship between Business Finance and Accounting; 6th edition
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