Managing finances i.e. cash flow

 

Managing finances includes collection of financial means, settling debts and liabilities, settling claims, recording and monitoring of all financial transactions, providing the answer how to adjust needs and possibilities of the contemporary business activities within the limited market or time.

 

Liquidity is one of the most important preconditions for unobstructed business activities. We can often witness a company showing profit on the account but at the same time not being liquid, which causes disturbance in business activities such as suppliers giving up the orders, losing buyers, losing qualitative people, inability to settle liabilities in banks, taxes to the state, and liabilities to employees. Market share decreases i.e. it comes to bankruptcy or liquidation in case that mentioned disturbance lasts for a longer period of time.

 

It is extremely important how the company collects the money, manages the money and money equivalents, and how it is used.

 

Managing costs

 

Every cost is justified if the benefit it creates are bigger than value of resources that are sacrificed for it. In order to manage costs, they should primarily be collected, classified, recorded, i.e. equally distributed by types and awarded to product, service or center of responsibility. At the end they should be analyzed.

 

It is necessary to create procedures that will assist us in rationalization of costs, which will effect motivation of employees and their wish to monitor costs in the scope of their work and also on the wider range.

 

It is also extremely important to introduce obligatory reporting on developments that were achieved in rationalization of costs and reasons for the success, but even more for the failures.

 

Optimization of business activities

 

Under the current conditions of business activities, companies have very small maneuvering space for making important policies and decisions related to increase of incomes, i.e. decrease of costs in order to make targeted profit.

 

That if why, it is of crucial importance to have optimization of business activities, i.e. processes within the company in order to make space for adoption of range of timely and qualitative decisions that will in close and distant future influence on realization of success or survival of the company.

 

Strategic planning

 

Strategic planning has a task to create business policies for the company i.e. projections of future activities that will bring the company to better position than where it is today.

 

Planning with the goal to enhance the business activities and better profitability should give an answer to basic questions: where do we want to go, when and in what way?

 

Some of the questions that strategic plans should give answers undoubtedly are: do we give advantage to fast growth or satisfactory rate of profitability, differences in assortments i.e. wide or narrow range of assortments, variety of distribution channels, as well as clearly defined policy in relation to claims and debts, supply, production, stocks and costs..

 

Creation of business plan and monitoring its realization

 

Planning is a process where a company is setting its goals, future tasks, activities, resources and ways for their realization, and at the same time creating conditions for permanent realization of success.

 

It is never possible to fully foresee everything that will happen in future, but that does not justify us to leave everything to coincidence.

 

A company shows with a business plan all things that it wishes to accomplish in both quantitative and qualitative sense, and it contains information that company will, as a rule, always use limited available resources.

 

Consulting in selection of accounting policies and optimization of tax liabilities

 

In order to have administration i.e. management selecting accounting policies that realizes overall goals of the company, it is necessary to have good knowledge of accounting regulations and effects that they have on presenting total value of the company. MSFI and HSFI present framework and assist in having all business activities recorded on the basis of the adopted accounting policies and at the end encompassed in understandable, transparent and comparative information presented in basic financial reports of the company.

 

When selecting accounting policies, one should pay attention on effects that adopted accounting policies will have on overall set goals in the company.

 

Financial reports created in such way are the basis for adoption of business decisions.