I would like to ask you about what your business objectives were at the beginning of the year, expressed in numbers, and the extent to which they have been achieved. It would be nice to be able to explain, in a factor analysis, why objectives have not been achieved or exceeded. Many entrepreneurs think that as long as objectives are met an analysis is not required, which can be a trap. Just like, for instance, an increase by 5% is insufficient on a market which has grown by 10%.
There are some aspects which you need to master in terms of numbers:
- the price strategy – is a mix of commercial/marketing and finance elements. The (technical) computation of the price requires thorough effort. There are working recipes indeed, but careful adaptation to each individual company and product is required. Moreover, regular revision of cost standards is included.
- Income & Expenses review and forecasts (P&L). Again, the ingenious factor lies in coupling both activities. It is important that forecasts not be static, that they grow with the market, depending also on competition conditions, on costs, taxes, etc.
- The Cash-Flow must be correlated with the P&L and to include “reserves”, based on experience.
Thus, these financial tools must be achieved with the contribution of the business person, who is knowledgeable of the market, of the commercial/client aspects, and who can best make the necessary estimates. No matter how good, a financier cannot work without your input.
What do you do though when your accountant only delivers the compulsory items and this immediately before the due dates for paying taxes?
I have come to know entrepreneurs who do their own bookkeeping, without correlating it with accounting or rely on it for review and forecasts.
The recommended solution is the implementation of a system for the updating data in the finance-accounting system in (near) real time, at least on a weekly basis, including the provisional monthly closing, at the beginning of the following month, plus a reporting in Trusted App, business review and simulator.
Read these articles as well:
- Finances in time of crisis: how does the Business Simulator help
- Scenario-based strategy and Trusted App
- The Scoreboard: The compass to a solid business
In other words, I invite you to do the following:
- Attend workshops with other entrepreneurs, aiming at acquiring basic concepts. Check out the Trusted Advisor webinars agenda here.
- We are working together on the original project for setting up the 2021 Financial Strategy, whose components you can find above.
- We assist you with the Implementation in 2021, by organising training and working sessions with your team and monthly recalibration meetings.
If you think this process might be of help for you and your company, please leave a message with your company details for us to set the first free of charge appointment aiming at appraising the extent of the project, here.
About me: I have been working in the field of financial, fiscal and management consulting since 2000, almost 10 years of which I worked as a financial director and a strategy and operations manager at a multinational company (Timac Agro Romania – Groupe Roullier), operating on the Romanian market. My work was carried out in Romania, but I financially and strategically coordinated several projects in neighbouring countries such as Turkey, Greece, the Republic of Moldova and Ukraine. In my 17 years of activity, given the diversification of the carried-out consulting activity, I have had the opportunity to get to know and work with clients from several industries, from manufacturing and trading to services. My studies background is that of Mathematician and Economist. I became a chartered accountant in 2004 and a member of the ACCA (Association of Chartered Certified Accountants) in 2010. The companies benefitting from my financial, fiscal and management consulting work included both multinational companies, and SMEs and NGOs. I am a non-executive member of the Board of SMEs from various industries.
Trusted Advisor Services include business strategy, financial management and accounting.
We organise the series of TRUSTED Advisor by Ioana Arsenie events by which we offer specialised skills to all entrepreneurs interested in growing their business and in accessing a new stage by benefitting from professional help.
Our own tools: SCOREBOARD, BUSINESS SIMULATOR and TRUSTED APP.
#TRUSTEDApp provides the democratisation of access to financial reporting to companies whose budget does not include the implementation of ERP solutions. A monthly investment starts from EUR 5, depending on their turnover. The app offers a technological product to emerging entrepreneurs and it aims at diversifying business units, expanding to new markets and the company making the first million Euro. It is a web application and it helps with the automation of internal processes of both accounting firms and entrepreneurs.
It is a business intelligence tool facilitating access to enhanced visibility of financial results by categories of income and expenses, as well as the balance sheet, with the main performance indicators. Read more about Trusted App by accessing this article.
