Genesis Management Services Pty Ltd gmservices.com.au
genesis
SERVICES
EXPERIENCE
UNIT 1. FINANCIAL MANAGEMENT OBJECTIVES
Decision-making
To prepare financial feasibility reports for major decisions outlining costs, benefits and financial requirements.
To integrate decision-making with on-going financial reporting systems.
To identify the key decisions required for improving financial performance.
Performance Review
Ensure that adequate reporting systems are in place to produce regular financial statements.
Prepare monthly performance reviews based on these financial statements and highlighting the major variations between actual performance and planned performance.
Prepare recommendations concerning these variations to deal with the problems and/ or opportunities involved.
Planning and Budgeting
Prepare annual budgets for revenue, commission income and marketing costs in accordance with marketing plans.
Prepare budgeted financial statements (profit and loss budget), balance sheet budget, funds statement budget and cash flow budget.
Ensure that appropriate performance standards for time, cost and quality have been defined and integrated with business plans and budgets.
Funding and Investment
Ensure that the organisation has a reliable source of funds to meet operating and investment requirements.
To screen all investment proposals and to develop investment priorities in accordance with financial objectives and the availability of finance.
We
all know what happens when we don't have enough money for the job in
hand. We have to cut back or stop expenditure, increase income and/or
inject some more capital or borrowed funds into the business.
Conversely, having too much money available can lead to unwise
investments.
Most decisions and plans that you make will be finally expressed in dollar terms. Money is the common language of business, the common denominator, and you must be financially literate to be an effective manager.
Things you will need to learn:
how to measure and plan business performance in monetary terms.
to recognise that profitability is essential for generating enough short-term cash and funds (liquidity) and for long-term financial stability (security).
to become comfortable with the inter-relationship between these three variables, profitability, liquidity and security.
For example, you will see how low security can threaten profitability and liquidity and even the survival of the business. Likewise for example, you will learn how low liquidity can be overcome with careful analysis and action to improve profitability and/or sourcing additional funds by relying on a strong financial structure (security).
Without adequate recording and reporting systems your ability to effectively plan and control the finances of your agency will be greatly weakened. The quality of your decision-making will deteriorate and you will be subjecting the business as well as your career, to unnecessary risk.
It is always tempting to fly by the seat of our pants in business management. What seems quick and "decisive" executive action often ends up causing more problems than it solves.
There is no substitute for planning and decision-making based on good accounting and sound financial management principles and practice.
Copyright © Bill Wright 1994