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Effective Financial Management

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Effective Financial Management

Kogan Page,

15 min read
10 take-aways
Audio & text

What's inside?

Ultimately, your firm’s finances are its lifeblood. Learn to manage your accounts so your business can survive and thrive.

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Editorial Rating

5

Qualities

  • Applicable
  • Well Structured
  • For Beginners

Recommendation

In business, the numbers are everything. Finances constitute a company’s ultimate bottom line, and if you mismanage your accounts, sooner or later your firm will break down. Business expert Brian Finch shows you how to take charge of your organization’s money in this comprehensive guide. However, the book bases its information on UK law and practice, so non-UK readers will need to make adjustments for some of Finch’s comments and phrasing. Nonetheless, getAbstract suggests that first-time business owners of any nationality looking for a basic primer on how company financials work will benefit from reading it. After all, George Bernard Shaw once said that England and the United States are “two nations separated by a common language.” Clearly so, but when it comes to money, everybody counts the same way.

Summary

Financial Management Requires Solid Business Planning

Financial management concerns much more than just your firm’s bookkeeping. It also involves raising capital, budgeting, estimating and managing costs and cash, evaluating projects, purchasing supplies, creating financial statements and – just as importantly – communicating to your stakeholders about your company’s financial position.

When it comes to financial operations, everything starts with a business plan, which should consider and answer these questions, among others: Are your products and services right for your marketplace? Do your sales operations make sense? Do you have an effective Internet strategy? After your executive team members add their ideas to the plan, seek input from your investors or partners. Use your business plan in discussions with your banks. Include your sales figures for the past three years, as well as your current year estimates.

Make your business plan transparent, and never fudge your figures, even if they don’t present the most favorable picture: No business can overcome a reputation for dishonesty. Spell out a sustainable strategy that your competitors can’t easily copy, ...

About the Author

Brian Finch, co-founded a retail bookselling business and developed its internet arm, acting subsequently as its finance director.

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