WelcomeWorkshop onFinancial Management for New Entrepreneurs

Date: 3 May 2013Venue: Shishu Academy Auditorium, Chittagong.Organizers: চাকরি� খুজব�া না চাকরি� দে�ব�া and BDOSNCourtesy: Mohammad Nazim Uddin ACA, MBA.

Ground Rules Please keep your mobile silent and exit

in silence to take your urgent calls. No inside smoking during session time. Question answer session shall follow

the later part of the session. For remotely relevant issues, use after

session communication. Take a note of your emergency exit.

Who I am and what I do ?

I am the person who is assuming the risk for the sake of profit.

I raise financial resources , ensure effective utilisation to achieve my goal of making money & appropriate my financial resources at times.

I am an entrepreneur………………

Look at my scope of work ! Meet customer demand to secure business and

earn. Anticipation : Estimate the financial needs. Acquisition : Collect finance from alternative

sources. Allocation : Maintain fixed and current assets. Appropriation : Take profit keeping the required

reserves. Assessment : Follow up and control the business

transactions and financial activities.

I am an entrepreneur………………

I can do everything myself !

As an entrepreneur i shall focus on customer needs and like an Accountant and Finance Manager I shall do my financial management myself. Thus- I can save money and- I can keep my privacyAfter all I am investing my money. So I am my own Accountant and I am my own Finance manager.

I am an entrepreneur………………

I am in a work dilemma ! I am busy to meet customer demand to secure

business and earn but i need: Financial information like cash and credit

sales, Timing of collection from debtors and payment to creditors, timing and size of loan repayments, cash in hand and at banks etc.

Record all my business transactions. Assessment and analysis of my business's

performance. Audited financial statements to apply for loan File annual returns with RJSC. File business tax returns.

I am an Entrepreneur…………….. Financial Management in my Mind At early stage I had a believe that I would

be able to do all my finances from own source and thus wanted the do my financial management and accounting in my own manner.

Later I found myself so busy that I could not manage time to take care of the financial management and accounting part of the business.

I am an Entrepreneur……………..

Financial Management in my Mind I heard many instances where the owners took

finance & accounting into their own hands, and unfortunately have not succeeded in the process.

Now I understand why staggering failure rate for new businesses has more to do with bad financial management than almost any other problem.

So I like to keep the financial management and accounting work out of my job task.

I am an Entrepreneur……………..

Financial Management in my Mind Hope all the small business owners like me,

shall begin to REALIZE the importance of Financial Management and Accounting for the business sustainability.

So I have one advice for new entrepreneurs that ensure ACCOUNTING AND FINANCIAL SYSTEM so that you can concentrate in your customer and business without loosing the control of your MONEY!

I am an Entrepreneur……………..

Accounting & Finance in my Mind To build and get benefited from Accounting and financial management system, I need to understand:

Accounting: What does it mean? Finance: What does it mean? Accountant: roles, responsibilities and authorities Finance Manager: roles, responsibilities and authorities Accounting system: what activities, devices and process

are there to control the flow of information and documents? Account and finance books of records, registers and

vouchers. Posting: Basics of debit-credit and Accounting equation Methods of accounting.

I am an Entrepreneur……………..

Accounting & Finance in my Mind Information needs and Accounting software. Risk aspects: Internal controls, Segregation of duty,

Cheques and other instruments, Fixed assets, Deeds and agreements, Statutory filings, Physical verification.

Financial statement: Five key parts/elements of a complete set.

Financial analysis and interpretation: Ratio analysis, Trend analysis, Common size analysis.

Audit: Internal and external. Accounting terminologies/languages: fictitious assets

like preliminary expenses, revenue, direct and indirect expenses, cost, expense, gross profit, net profit, depreciation, amortization, accruals, intangible assets, income tax expense, deferred tax asset/ liability.

I am an Entrepreneur……………..

Accounting in my Mind Why do I understand accounting when I pay an

accountant?

Keep accurate records (legal requirement of yours!) Help accountant to help! (understand his/her

requirements) Effective review and follow up of accountant’s work.

(follow up matters!) Prevent fraud and error (it affects monetary decision

and financial health) Save money (Avoid unnecessary fees such as

overdrafts and late charges) Ensure unqualified audit report and minimize

management letter issues (Secure financial credibility)

I am an Entrepreneur……………..

Accounting in my Mind What can I do If I am too small to afford accounting for the time

being?

Mind each transaction and not a group of transactions! Never mix up personal transactions with business

transactions. Capture the WH details and file supporting documents of

every transactions (at least when money comes in and going out) so that you can hand it over to a professional accountant later.

Make a family member/relative/business partner/ employee (who got the basic) accountable to keep the books until the profits allow for the hiring of a professional bookkeeper or accountant.

Hire a part timer having assured of his capability. Outsource to accounting and consulting firms through an

engagement letter.

I am an Entrepreneur……………..

Financial Statement in my Mind How can I read and understand a Financial

Statement ? I shall take a complete set of financial statement where my purpose is to determine:- Is it financially strong or weak, both in short term and long term?

- whether the company has made or lost money, in this year, last year and since inception.

- what is the status of capital ? Does it increased or decreased over time.

- where and how the cash flow? - How can I use the information available as “Notes to the financial statements.”

I am an Entrepreneur…………….. What I have learn by investing my time

ReviewSummarize

&

Questions