Finance is critical to the bottom line and firm's existence. Since resources are scarce, it is critical for managers to keep the bottom line in mind when negotiating decisions.

That is why, HR and Finance within the same company sometimes have conflicting goals.

One criticism that corporate leaders have on HR is that HR managers are not very familiar with how the firm makes money. So HR professionals need to know and understand financial statements to gain credibility in the wardrooms.

Often HR is encharged to provide headcount information which is critical in hiring or reducing the workforce. If an HR professional can also make an argument why the hiring or firing makes business and financial sense, then he/she can be more effective in negotiating and becoming a trusted advisor.