What finance and accounts handles
The daily work is transaction accounting: booking purchase bills against the purchase order and goods receipt note, raising sales invoices, matching bank statements, and posting expenses in Tally or the company's ERP. Around that sits the monthly close, when the team reconciles vendor and customer ledgers, books provisions and prepares the MIS that management reviews. Taxation covers GST returns, TDS deduction on vendor payments and salaries, advance tax and the annual income tax return. Finance also manages bank limits, cash flow forecasts and the statutory and tax audits, which the external auditors complete after the financial year ends on 31 March.
- Accounts payable: vendor bills, three-way match, payment runs and vendor ledger reconciliation
- Accounts receivable: invoicing, credit notes, collection follow-up and customer ageing
- Taxation: GST returns, TDS returns, advance tax and assessment replies
- Treasury: bank limits, fund transfers, fixed deposits and forex covers
- Controllership and MIS: month-end close, budgets, variance reports and audit schedules
Finance team size at 50, 500 and 5,000 employees
A 50-person company usually runs finance with a senior accountant or accounts executive, supported by a CA firm that handles GST and TDS filings, the tax audit and the annual accounts. The owner signs every payment. A 500-person company usually has a finance manager or head of finance with separate executives for payables, receivables and taxation, a cost accountant if the company manufactures, and an accountant at each plant or large branch who reports to the head office.
By 5,000 employees the function is led by a CFO. A financial controller owns the books and the month-end close, a head of taxation handles direct and indirect tax, a treasury manager deals with banks and borrowing, a financial planning and analysis (FP&A) team builds budgets and forecasts, and internal audit reports independently to the audit committee or the board. A shared services team often processes payables and payroll accounting for every unit from one office.
Where finance meets HR, sales and purchase
HR hands over the finalized payroll, and finance transfers net salaries and deposits PF, ESI and professional tax. Monthly wages must be paid by the 7th of the following month, and an employee who leaves must receive wages within two working days, so finance keeps funds ready for exits as well as the regular run. Sales depends on finance for customer credit limits, invoice corrections and collection targets. Purchase raises the orders that finance later pays, so both teams agree on vendor credit terms and on who chases a missing goods receipt note. Every department head receives a budget from finance and a monthly report of actual spend against it.
Payment approvals and reporting lines
Companies usually write a delegation of authority matrix that fixes who can approve what. For example, the accounts manager approves vendor payments up to ₹1 lakh against approved purchase orders, the head of finance up to ₹10 lakh, and the CFO or MD anything above that or anything without a purchase order. Net banking runs on maker and checker: an executive uploads the payment file and a senior approver releases it. The CFO reports to the MD or CEO, and in companies with a board audit committee also presents results and audit findings to that committee. Plant accountants take daily instructions from the plant head but follow the controller on accounting policy and closing timelines.
Typical finance and accounts team structure
Finance and Accounts designation hierarchy
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What is the hierarchy in a finance department?
The CFO heads finance, with function heads such as the financial controller, head of taxation, treasury manager and FP&A manager below, then accounts managers, and accounts executives and assistants at the base. Small companies compress this into a finance manager, one or two accountants and an outside CA firm that handles filings and audits.
What is the difference between accounts and finance?
Accounts records what has happened: bills, invoices, payments, ledgers and financial statements. Finance decides what should happen next with money: budgets, funding, bank limits, investments, pricing support and cash planning. In small companies the same team does both, and the split usually appears when a CFO or finance head is hired above the accounts manager.
Who does the CFO report to?
The CFO answers to the managing director or CEO. Where the board has an audit committee, the CFO also presents quarterly results, audit findings and internal control issues to that committee, which gives the role some independence from day-to-day management and a direct line to the board on the numbers.
Does a 50-employee company need a full-time accountant?
Yes, in most cases. A company of that size raises invoices, pays vendors, runs payroll and files GST returns every month, and books written up once a quarter create errors that surface during audit. A full-time accounts executive handles the daily entries, while an external CA firm usually takes care of tax filings, the tax audit and the annual accounts.