Financial Management Tips for SME’s

Volume 1, Issue 1 | 09 November 2018

Areas of specialty:
Accounting | Taxation | Advisory | Business consulting

Inside this issue:
Key elements of business financial analysis, Cash-flow optimisation, Management accounts for strategy, 5 Top financial management tips, Profitability analysis & 3 E’s, Compliance for profitability & sustainability, About us and our professional services.

INTRODUCTION

The current economic turmoil is leaving most businesses exposed to tough trading and financial risks due to sales decline, defaults on debts as a result of poor cash-flow etc. At the same time, tough economic conditions, volatile markets and intense competitive pressures provide a real opportunity for accountants to step up their influence, bringing benefits to the whole business to add value.

This concept of involving accountants into overall functional areas of the business is called finance business partnering. Some high performing businesses already fully embrace business partnering in finance, into their business model in a comprehensive or sustainable way.

This newsletter draws on our experience of working with businesses that have mas-tered Finance Business Partnering and already engage with us to realise benefits and more.

Here are some of the finance business partner definition:

– Build strong relationships with stakeholders.
– Translate data into meaningful insight.
– Bring numbers to life.
– Influence business decision making process.
– Improve business performance and cash-flow.

In the next few pages, I will be sharing few tips to help you as business owners with financial management of your business in order to grow.


WRITER'S NOTE

The purpose of this newsletter is basically to help business owners and entrepreneurs to flourish, prosper and grow their businesses the right way!

We help SME Sector maximise profits & optimise cash-flow through sound financial business partnering focused on their business needs. We take their businesses from “Good to Great”.

We endeavour to service all types of clients in different industry sectors of the economy with Professionalism, Respect, Integrity, Confidentiality and Excellence.

darkness and sun light


Financial Management Tips for SME’s
Critical key elements for business financial analysis

It is very crucial to establish and maintain business financial analysis in your business to understand what is going on for growth and where you need to improve.

Financial analysis plays an important role to give you answers you need, therefore every business needs to do at the minimum the following key business financial analysis (ratio analysis):

Profitability = net profit margin; return on assets; return on equity
Liquidity = current rati-os; working capital ratios
Solvency = interest cover; debt to asset ratio; equity ratio
Activity = debtors days; creditors days; inventory days

These ratios will help you to make informed decision about your business whether it is profitable, generating returns for the shareholders, solvent & can meet financial obligations and cash management is good. As a business owner make sure these are part of the monthly reports to see early warnings if something is wrong.

cash is king


CASH FLOW OPTIMISATION

Among the effective methods of optimizing cash flow is maintaining accurate & complete asset register.

This ensures that you claim wear & tear / allowable depreciation deduction expense on assets which will reduce the tax liability and improve cash flow.

Also ensure that you keep all your expense records for running your business even if you running it at home you can still claim rental expense for the space you utilising as office / your trade against the income which again reduces tax liability and im-proves cash flow.

stick to your budget


MANAGEMENT ACCOUNTS FOR CRITICAL STRATEGIC PLANNING

Management accounts is critical for business strategy and planning which inform you how the business is doing, where the short comings are and the underlying causes so that appropriate action is taken.

Ensure you prepare Management accounts with complete analysis of key information and dashboards for the period; Balance sheet with comparatives and ratio analysis; Income statement with comparatives analysis: month-to-month, year-to-date and prior year; Variance report with commentary: to explain causes of variances and action to be taken Cash flow statement detailing cash analysis and movements for the period; Tax pack to show tax liability for the period so that you plan cash flow accordingly.

Stick to the road ahead


Volume 1, Issue 1
5 TOP ACCOUNTING & FINANCIAL TIPS FOR ENTREPRENEURS

#1 Make sure you always know and understand your finances especially cash flow is very important to run business efficiently & effectively.

#2 Always maintain proper financial & accounting records not only for compliance purposes but also to show investors and financiers you can be trusted with their investments.

#3 Cost management is critical to sustain growth, outsourcing some of non core functions to experts at fraction of the cost can result in efficiencies and increase profitability, experts take care of all noncore activities; while you focus on your core activities and grow your business.

#4 Ensure you keep all expense records of your business even if you running it at home you can still claim rental expense for space you utilising as office / your trade which reduces tax liability & improves cash flow.

#5 Keep hustling hard and support other hustlers by sourcing products & services from black businesses.

The three E's


IMPORTANCE OF PROBABILITY ANALYSIS & 3 E's

As a business owner and entrepreneur, it is crucial to perform customer & product prof-itability analysis to understand which products & customers worth your full attention and focus on those than serving loss making customers and products.

These analysis not only help you to focus on growing potential revenue through acquiring and retaining great customer base; offering great products that generate the highest revenue; it will also help you to understand, manage and where possible reduce costs associated with these products & customers which ultimately increase profits and increase shareholders’ wealth.

In addition If the 3E’s principle is applied correctly the profitability of the overall business will certainly be achieved!

The sky is the limit for your business growth


COMPLIANCE IS CRUCIAL FOR BUSINESS PROFITABILITY & SUSTAINABILITY

Complying with OHS legislations; company laws; and tax laws as well as operating ethically will save you money from penalties and create strong brand for your hustle & strong brand is one of the (CSF) critical suc-cess factors.

Among things that will make the taxpayer unable to obtain Tax Clearance Certificate is non compliance with SARS in respect of either registration, filing and / or payment responsibilities; ensuring you submit the CIPC annual returns will ensure your business continue to operate legally; ensuring compensation fund return of earning are filed will ensure your business is always in good standing with DoL and any employee injuries claims will be honoured and paid. Make sure your business is compliant at all times.

About siphim consulting

Barcelona Complex
52 Mulder street
The Reeds
CENTURION


Phone: 084 432 6300
Cell: 081 426 6476

E-mail: info@siphim.co.za
Website: www.siphim.co.za

Established in 2013 with the aim of providing financial and management accounting, business consulting, taxation and advisory services to SME sector; practice is managed and run by Siphiwe Mthembu, who has over 18 years of Accounting and Financial Management experience from corporate sector; Bcom Honours in Management Accounting qualification and a CIMA Strategic Case Study Level candidate.

OUR MISSION: To be the Accountants of choice and the "GO TO” Finance Business Partners for SME sector

OUR VISION: To be a leading provider of a full suite accounting, taxation, business consulting & advisory services to SME sector

OBJECTIVES: To provide cutting edge efficient, excellent and steward services at the most reasonable rates possible; and to empower the clients and customers with real pragmat-ic business solutions tailored to suit their unique individual business needs

OUR VALUES ARE “PRICE”: Professionalism, Respect, Integrity, Confidentiality & Excellence

There is a new dawn for your business, just look.

OUR PROFESSIONAL SERVICES

Accounting services
Book-keeping & Taxation; Management ac-counts; Advisory services & compliance

Payroll services
Payroll processing & management

Financial statements services
Annual financial statements preparation

Specialised services
Ad-on specialised services; Ad-hoc projects and costing services.

Business consulting services
New co registration packages; CIPC amendments; CIPC returns; Income tax and VAT returns; Co profile & Business pro-posal; Business plans

Compliance services
Certificates of compliance service

Sage Business Cloud Certified Advisor
Accounting & Payroll Cer-tified Advisor

Partners
SARS
CIPC
Sage Business Cloud

make an enquiry

081 426 6476 | info@siphim.co.za

Contact us to experience a business approach that is customer and client driven based on the following fundamental principles and values:


• Transparency, commitment to quality & excellent service;
• Great value for money through affordable, fair and cost effective pricing. 
• Integrity, objectivity, professional competence & due care, professional behaviour and confidentiality;


As a consulting company, pride ourselves with the quality of our work because we take time to prepare and engage our work in a way that does not compromise quality and is compliant with the professional bodies, laws and regulations and advice provided is based on ethical behaviour. We have the skills, experience and professionalism to make your vision a reality!

Contact us image
Location

Barcelona Complex
52 Mulder street, The Reeds, Centurion

Contact

Cell: 081 426 6476
Phone: 084 432 6300
info@siphim.co.za

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