The basis of market relations is money connecting the interests of the seller and buyers. As a result of economic relations, financial relations arise in which market participants earn and use money for different purposes, while creating their own monetary funds. At the same time, the concept and functions of finance are a key category of interaction between market entities.
Finances have the following general features: they are associated with the state, the production process, commodity-money relations, are a category of value (money), distribute GDP and ND, are expressed in real money funds. The essence of the role and functions of finance are interconnected.
The essence of finance is revealed through the functions of finance. They are implemented through a financial mechanism, which includes organizational forms of financial relations in the field of the national economy, the use and formation of centralized and decentralized funds, financial planning methods, financial legislation, financial planning methods, etc.
Finance has a number of functions . Under the function refers to the manifestation of the economic category of its essence, through it reveals the range of responsibilities that this category performs. Functions of finance are stable and objective.
In economic theory, there is no single point of view on the functions of finance. Most researchers distinguish such functions as control, regulatory and distribution.
The distribution function is carried out in all areas of public life: the intangible sphere of material production, circulation. At the micro level, the subjects of distribution are legal entities and individuals, at the macro level - the state. Distribution is subject to GDP and ND.
This function covers three sequential and interconnected stages: the formation, further distribution and use of funds. Under the formation of funds refers to the financial resources of business entities, households and centralized funds of the state. These funds are allocated using financial instruments. The use of finance ensures the expanded production and life of individual members of society, as well as the improvement of the national needs of the entire population.
The control function is associated with the movement of monetary funds to the value of GDP. With its help, the reproduction process is displayed through financial resources. Financial control informs the public about problems in the economic and monetary relations in the country. This function signals deviations in the proportions of NI and GDP, the need for the formation of trust funds of funds, the creation of security with the necessary production resources.
The control function is manifested before the onset of the distribution process, in the process of using cash funds, when summing up and evaluating the performance of cash funds. The function is implemented through financial and economic, financial and budgetary and credit and banking control.
The objects of the control function are the financial performance indicators of enterprises, firms, organizations. In this matter, much depends on the activities of the chief accountant, employees of the financial department, the sufficiency of financial information and discipline in the field of finance.
The regulatory function is associated with government participation in reproduction processes. At the micro level, this function stimulates the activities of enterprises (by creating funds to improve the quality of the production process), at the macro level it regulates government spending, state credit, and taxes.
These are the main functions of finance, which reveal the essence of this sphere of relations.