Download - Improving Financial for SME
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I m p r o ve d F in a n cia l
M a n a ge m e n t Fo r SM Es22 October 2012
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CONTENTS
1. What is Financial Management?
2. My experiences of the challenges faced by SMEs
3. Whose responsibility is Financial Management?
4. Jargon Buster
5. How to improve Financial Management?
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WHAT IS FINANCIAL MANAGEMENT?
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Financial Management means p l a n n i n g ,
o r ga n izin g, d ir e c t in g and c o n t r o l l i n g the
utilization of the fir m s r e s o u r ce s .
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MY EXPERIENCE OF FINANCIAL MANAGEMENTINFORMATION IN SMES
1. Entrepreneurs too proud to let on they dont understand the information
2. Accountants are more interested in adding up the numbers than
interpreting the information
3. Financial management information is not user friendly
4. Accountant is not user friendly talking to them is hard work
5. Entrepreneur doesnt have the time to interpret the information
6. Entrepreneur doesnt want to interpret the information/ spoil the dream
they already have enough on their plate
7. N o o n e is u s in g t h e in fo r m a t io n / t h e b u s i n e s s is d r ivin g b lin d
8 . E ve r y m o n t h p r e d ict a b le a n d o ft e n a vo id a b l e ca s h o r p r o fit
s h o r t a g es co m e a s a s u r p r is e
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WHOSE RESPONSIBILITY IS FINANCIALMANAGEMENT?
Your accountants?
Financial management is too important be left to your accountant.
Your financial management information contains the answers to
improving your financial performance survival, annual returns, exit
dreams.
You can delegate the preparation but you should not delegate the
knowledge and understanding.
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DO YOU KNOW
Who are your most and least profitable clients?
What are your most and least profitable products or services?
What value of sales did you generate last month?
What value of profits did you generate last month?
How much cash did you generate last month?
What caused the difference between your profits and your cash
position that month?
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PROFITS AND CASH
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THE DIFFERENCES BETWEEN PROFITS AND CASH
Income statement (P&L): Income less costs = net income (profit)
Cash flow statement: Cash in less cash out = net cash
Why does net income not equal net cash?
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JARGON BUSTER
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JARGON BUSTER
Prepayments
Accruals
Depreciation
Work in Progress
Amortisation
Inventory
M a t c h i n g - ensures the Income statement accurately reflects the results of the business activity for the periodCa s h f lo w s t a t e m e n t - explains the movement in cash in a period
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WHO CAN HELP?
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WHO CAN HELP AND WHERE DO I START?
Entrepreneurs too proud to let on they dont understand the information Accountants more interested in adding up the numbers than interpreting
the information
Financial management information is not user friendly
Accountant is not user friendly talking to them is hard work
Entrepreneur doesnt have the time to interpret the information
Entrepreneur doesnt want to interpret the numbers / spoil the dream
No one has visibility of the information/ business is driving blind
Every month predictable and often avoidable cash or profit shortages
come as a surprise
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WHO CAN HELP AND WHERE DO I START?
Entrepreneurs too proud to let on they dont understand the information Accountants more interested in adding up the numbers than interpreting
the information
Financial management information is not user friendly
Accountant is not user friendly talking to them is hard work
Entrepreneur doesnt have the time to interpret the information
Entrepreneur doesnt want to interpret the information/ spoil the dream
No one has visibility of the information/ business is driving blind
Every month predictable and often avoidable cash or profit shortages
come as a surprise
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INNOVATION AND CAPABILITY VOUCHER (ICV)
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Planning andBudgeting
Cash-flow andWorking Captial
Management
Financial ControlsFinancial
ManagementAdvisory
Financial andBusiness
Assessment forGrowth
All support p l a n n in g, o r ga n izin g, d i r e ct in g and c o n t r o l l i n g
the utilization of the fir m s r e s o u r ce s .
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TAKEAWAYS
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TAKEAWAYS
There a variety of reasons for the poor financial management in SMEs
Financial management is necessary for survival and maximizing returns
You cant delegate financial management to your accountant
There are grants available for us to help you
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Mazars LLP133 Cecil Street#15-02 Keck Seng TowerSingapore 069535
Tel: +65 6224 4022Fax: +65 6225 3974
www.mazars.sg
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