“No one can make millions and keep millions without learning about Finance”

“No one can make millions and keep millions without learning about Finance”

Business Finance

The business community and people use different means (sources) of payment like currency, cheque and bills and exchange etc. for the settlement of business dealings or transaction. Therefore, the arrangement of these sources is very, essential for the life of business. The money (capital) obtained for the purpose of business is spent on the purchase of land, buildings, machinery, furniture and routine expenses. The arrangement of capital, its arrangement and use for business transactions is called business finance or investment.


“Finance consists of providing and utilizing the money, capital, rights, credit and funds of any king which are employed in the operation of an enterprise”

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Function of Business Finance
  • Purchase of Assets

When a business is established many assets like land, building, plant and machinery etc. are purchased to run the business. The purchase of these assets is possible with finance.

  • Repair and Maintenance

For the proper working of assets repair, renewal and maintenance is necessary. The maintenance of assets cannot be done without finance.
  • Purchase of Goods / Raw Material

Purchase or import of goods, raw material and many other items necessary for the business. The purchase of these items is made by means of finance.
  • Research Work

Technological changes and research work at the business research center or purchase of technology is essential for successful business. The finance is useful for it

  • Routine Expenses

For the payment of routine expenses like salaries, wages, carriage, rent, repair, interest, commission etc., most liquid asset is desirable and that is finance
  • Services of Communication

Business manages use telephone, telegraph, facilities, radio, T.V, newspaper etc. as the tools for increasing sales. The payment of these services is made through finance.
  • Risk coverage

Businessman are not free from risks. There are chances of loss due to theft, fire, food, war, earthquake. But the finance helps the business people to cover the risk of loss through insurance.
  • Taxes and Duties

Claims of government in the shape of sales tax, income tax and excise duty are paid with the help of finance.
  • Invention

Invention of new products and their availability for business is only possible with the help of business finance.
  • Storage Charges

A trader has to buy goods according to the demand of customers and these are stored in form of stock. Business finance is necessary to meet storage charges.
  • Expansion in Business

Expansion in the size of business is possible due to finance. It puts the men, machinery and material at work.
  • Change in Business

A trader can change the nature of business. The finance helps to complete the sale of old assets and purchase of new assets.
  • Retirement Benefits

Employees of the company need financial help after retirement. They company needs finance to set up a pension fund for their workers
  • Training of Employee

Training of employees to run the business effectively is necessary from time to time and the salaries of instructions are paid with the help of finance
  • Services and Experts

A business must be in the hands of experts and experienced professionals to run the business affairs on most modern lines. The finance can provides the services of the trained management force for the best interest of business.


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