I was asked by a small business owner yesterday about the management of finance in his business , and in particular cash.I explained to him that the finance management was not just about creating a set of management accounts and filing a year end report.
It seems rather insulting when speaking to a courageous business owner but the reality , as with many , he did not know what he did not know.
I explained that the main components of cash control were planning /forecasting ,spend control,margin analysis,working capital and debt management.
Seems rather obvious when one sets it out but only if one has experienced it , does it become obvious. This intrigues me because , having gone to countless courses and with a University education ,it is the day to day management of very practical things that actually is missed off the curriculum.
The reality is that many businesses fail because there is not a complete understanding throughout the business about what is actually happening on the ground in relation to financial impact.
We were able to help by looking at his own systems and allowing him to gaze through the looking glass to understand his business in a more definitive way.As an entrepreneur in a hurry, he was told "make haste slowly " and the business will prosper.Decisions based on data make for better business management.
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