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Nursery ManagementUnderstanding and Managing Finance

Session 1

4Case Study

You are a personnel officer in a large nursery, and one of your employees, a young early years worker has been chosen to attend the local Business School to study for a diploma in management. He is reluctant to sign up for the course because it includes a subject called “Financial Management”. He thinks it will be a waste of time to study such a subject.

Prepare some notes that you could use in speaking to her in order to show her benefits of studying financial management.Dyson (1997) - Accounting for non-Accounting Students

12Stakeholders and their Needs

For Accounting information to be useful, it must be put in a form which is relevant to the needs of the user.

The next slide identifies 10 possible stakeholders in an early year’s setting.

Each will have their own need in terms of information on which they will base their decisions.

13Stakeholders and their Needs

CUSTOMERS Continuity of supply of childcareAbility to meet needs

COMPETITORS Threats to ‘sales’ and profitsProvide comparisons of costs and

performanceEMPLOYEES Job security

Remuneration- comparison with other organisations/profits

GOVERNMENT TaxStatutory legislation

COMMUNITY Contribution- services providedJobs

14Stakeholders and their Needs

SUPPLIERS Ability to pay for food, electricity etc

LENDERS Ability to repay, Security of investments

Credit riskFinancial structure

MANAGERS Pay and conditions

Company Performance and Planning SHAREHOLDERS(Limited Companies) Organisational performance

Value of shares, Return versus riskManagement performance

FINANCIAL ANALYSTS PerformancePlans and Objectives

15Case Study 1 - solutionThe personnel officer might say something like:

In terms of future prospects, if you intend to progress upwards through the career structure, then you will inevitably need to take responsibility for some aspect of financial management. 

You might be required to work within a budget, complete an end-of-year financial report or produce evidence for auditors or accountants who will be attempting to measure the performance of your department.  

Having some understanding of basic accounting procedures will allow you to be proactive, and make the accounting work for you, and to your advantage, rather than reactive, in simply acceding to the demands of the accountants and auditors. This means that the department that you run is more likely to be effective, and you are more likely to gain promotion.