Financial Management

 

Accounting is concerned with recording, classifying and presenting the transactions of your company in financial terms. Financial management on the other hand, is interested in determining the best way to use the financial resources available to improve future opportunities, to earn a high level of return on your investment, congruent with your goals of course and minimize the impact of financial shocks. This process creates value, and added value means increased wealth.  Where an accountant would ask, “Were transactions categorized properly” and “Were Generally Accepted Accounting Principles (GAAP) adhered to in recording and presenting the data?”, a financial manager would ask, " What does the data tell us and how should we now allocate to maximize the value of the firm?".  Financial management is focused on assessment rather than technique. 

Planning & Budgeting - No matter the size of your business, you need a plan.  Whether your expanding your current business line or creating a new one you simply need a plan to give you focus and provide you with metrics to measure your progress. 

A big part of this process will be to manipulate your business data for ongoing analysis.  Excel is an excellent but complex tool for just this type of work and we are very good at creating customized and dynamic spreadsheets that can account for a lot of what if variables and yet be users friendly. 

Project & Acquisition Valuation Assessment - As mentioned, financial management is focused on assessment.  In particular, the assessment of available resources, past performance and equally important, valuations of your potential projects or investment opportunities as you decide what, where, when, why and how to proceed.  We will assist you in determining your available resources and the value to you, of potential projects and acquisitions. 

Treasury/Working Capital Management - The first segment of Financial Management is focused on the short term, operational needs. This includes the monitoring of all current assets and current liabilities to ensure the company meets all its current obligations. Efficiency improvements in this segment of financial management is the most critical to survival, corporate health and shareholder value.  Cash management is number one on everyone's list, or at least should be,  because as the adage goes, 'cash is king'.  Properly executed accounts receivable and accounts payable policies and procedures is a key area frequently neglected.  Close tracking of short-term obligations can avoid unnecessary costs.  Inventory management, for non service businesses is paramount for many firms as this frequently represents the single largest investment a firm makes.  Efficiency in this area can make the difference between success and failure.  

Long Term Capital Management - The second segment of Financial Management is focused on the long term, structural needs of the company. This includes all strategic planning, risk management, valuation of all capital investment decisions, capital structure (financing decisions) and of course dividend payments. These structural decisions are critical in shaping the financial foundation of the company over the long term.   Long term planning is key as no organization has much long term success with it.  And planning without follow up has little value.  Capital investments and financing decisions need to be made in a rational, business manner with the long term value of the firm as the goal.  Thorough assessment of opportunities versus goals is what is needed here to ensure profitable longevity.     

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