All the answers to your unique business lifestage questions
Good financial management systems that you can manage easily and effectively help you to cope with unexpected demands and deal with the everyday running of your business in a planned manner.
But it is not just about bookkeeping. Proper financial systems enable you to:
- Keep track of how your business is doing.
- Manage cash flow, workflow and meet deadlines.
- Monitor how well things are being done and establish levels of customer satisfaction.
- Improve your ability to do things right the first time.
Legislative issues are a major challenge for small business owners in South Africa, and proper systems help to ensure that the basics are taken care of so that you can get on with the business of doing business.
For example, you need to develop a good tax and Unemployment Insurance Fund (UIF) system to manage the daily running of your business and to enable you to retrieve information as quickly as possible.
If SARS requires information on your employees you have to be able to find and provide the correct PAYE and UIF information (as well as your own) almost immediately. Not keeping the necessary employee records, or not being able to access them easily enough, can have harmful ramifications for your business.
In a nutshell, financial management helps you to obtain the financial statements you need to measure your company's success, meet government requirements and gather facts for making sound management decisions.
It also allows you to analyse how profitable certain activities are, so that you can take advantage of those that make more money for your business, and eliminate those that don't.
What does a financial manager do?
As a small business owner, your responsibilities include keeping records, preparing budgets and forecasts, cost accounting, exercising internal controls, preparing government reports (where applicable), obtaining and monitoring insurance and data processing.
Other important functions include analysing data and determining how your company is performing, making recommendations about whether to expand or downsize, as well as coordinating your personal financial and tax goals with those of the business.