Business finance is also known as finance management or business accounting. Finance is the science of funds, the subject of studying accounting. It deals with all the expenses of a business, the sources of these funds, and theirocation, management, and allocation. Finance is the science of things concerning the development, creation, management, and utilization of resources. All businesses, large or small, need to keep records of their financial dealings.
Businesses must prepare their financial statements for tax purposes and these records are the evidence they need to give to their bankers, stockholders, and lenders. The preparation of financial statements is an involved process. Professional accounting services are necessary for the proper presentation of a company’s financials. A company’s bookkeeper can produce financial statements from the records of the business; however, computerized systems have made it possible for virtually anyone to produce financial statements on your behalf from your accounting records.
There are three important functions of business finance; financial planning, capital budgeting, and forecasting. Financial planning includes everything that relates to making a profit, setting up a business, attracting customers, funding assets, and making payments on accounts. Capital budgeting involves the determination of adequate capital needed for the functioning of the business and the identification of sources for obtaining these funds. Forecasting deals with the prediction of cash flows and their timing.