Improved Financial Management For SMEs

22 October 2012

CONTENTS
1. 2. 3. 4. 5.
What is Financial Management? My experiences of the challenges faced by SMEs Whose responsibility is Financial Management? Jargon Buster How to improve Financial Management?

WHAT IS FINANCIAL MANAGEMENT?

Financial Management means planning, organizing, directing and controlling the utilization of the firms resources.

MY EXPERIENCE OF FINANCIAL MANAGEMENT INFORMATION 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. No one is using the information/ the business is driving blind 8. Every month predictable and often avoidable cash or profit shortages come as a surprise
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WHOSE RESPONSIBILITY IS FINANCIAL MANAGEMENT?

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.

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?

PROFITS AND CASH

Titre de la prsentation

Date

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?

JARGON BUSTER

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JARGON BUSTER

Prepayments

Depreciation

Amortisation Work in Progress

Accruals Inventory

Matching - ensures the Income statement accurately reflects the results of the business activity for the period Cash flow statement - 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)

Planning and Budgeting

Financial Controls

Financial Management Advisory

Cash-flow and Working Captial Management

Financial and Business Assessment for Growth

All support planning, organizing, directing and controlling the utilization of the firms resources.
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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 LLP 133 Cecil Street #15-02 Keck Seng Tower Singapore 069535 Tel: +65 6224 4022 Fax: +65 6225 3974

www.mazars.sg

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