Core Small Business Skills - Financial Management

With research into Australian small business failures revealing that 90% of small business failures occurring as a result of a lack of key management skills, it pays small business owners and entrepreneurs to develop a core set of key management skills on which they can draw. Developing strong financial management skills is one of the core skills essential for the management and growth of any small business and entrepreneurs should learn to master these skills to ensure their ongoing viability and success.
Financial Responsibility
Many entrepreneurs abdicate responsibility for the financial management of their business to their accountants.This is a rookie mistake. As the business owner you must take responsibility and accountability for the management of your finances. For the planning, for the ongoing management and monitoring of the financial aspects of your business performance.
You are also responsible for learning to read and thoroughly understand the key financial reports. Work with your accountant to learn how to read each of the reports and to look for indicators as to your business's financial health.

Financial Planning
Financial planning and in particular forecasting is vital especially when it comes to managing capital and liquidity, because any shortfall for either will lead to the early demise of your business. You need to be continually looking ahead to determine your upcoming financial situation and to asses what needs to be done to meet those financial commitments.
Accounting System Management
The first core requirement is the ability to maintain an accounting system that is compliant with current taxation requirements, such as MYOB or Quickbooks. These systems provide a raft of automated processes including the delivery of key financial documents such as Balance Sheets, Income and Expense Statements and Cash Flow forecasts.
You need to be able to understand each business transaction and translate and record the details of each transaction into the accounting system. This information can then be used to generate your financial reports, and can also be used as the basis for your taxation returns.
Estimating and Pricing
Incorrectly estimating jobs or pricing your goods and services can be disastrous for your business. If you consistently charge less than it costs you to do the job, you will quickly run out of cash. While if you prices are too high you may just price yourself out of the market. Building your skills in estimating and pricing is paramount to the success of your operation and you should make yourself familiar with the various pricing models and learn to apply the model most appropriate to your situation.
Taxation Management
Taxation rules and regulations are a huge, constantly changing body of work, and it is best left to the experts in the field. However, that does not mean you don't have to build your own basic to intermediate body of knowledge. You need this to work effectively with your financial and taxation advisors. You need to know how to ask pertinent questions about the cause and effect of particular decisions and how they are declared for tax purposes, so that you can make informed tax management decisions.
You don't have to be a fully qualified bookkeeper or accountant, but it certainly pays to know and understand the accounts and financial elements of your enterprise. Work with your accountant and tax specialists to determine the most appropriate solutions in your particular situation but don't abdicate responsibility. Make sure you have them mentor your financial management skills along the way.
Karen L. Paiyo is an Australian Small Business Counsellor, supporting and nurturing the spirit of entrepreneurship in the Asia Pacific Region. Karen empowers small business owners by transferring to them the skills and expertise needed to help them take their business ideas from creative concept to profitable reality, faster and with less risk.

Take A Financial Management Course

Everyone is trying to be more frugal, more conservative and smart with their money. Even businesses are taking their budget more seriously and cutting out things which are not really necessities. For these reasons as well as others, financial managers have become in high demand in recent years. In order to properly maintain finances, one needs to apply specific management principles. This requires a lot of attention to detail, careful planning, and a good knowledge of monetary strategies, cash flow, and other complex processes and practices. Those who are running a large business, or just one with complicated finances will require the talents and training brought on board by a financial manager. Those who are trained through a financial management course can bring a lot to the table.
Financial managers usually have somewhat large tasks with stressful decisions to make. They will have the task of maximizing the companies wealth and properly distributing it as necessary to fulfill obligations, such as paying staff and other bills.
This individual will have to be well versed on the corporations activities to properly manage the task ahead of them, and they will need to be well educated and well founded with tools such as budgeting, management, accounting, risk management, reporting, accounting, and dealing with financial statements and tax preparation.

People who take this role will have to be disciplined, educated in the practices of financial management, and be well able to work under pressure and stress. They will also need to be able to take a leadership role and keep others on task who work under them, strategically assigning responsibilities as necessary. This is a job that is vastly important and requires a highly responsible and trustworthy
The appropriate skills for this job type can be gained through associates or bachelors degrees that are available at a number of institutions and even online colleges. Some will choose the online college because of its flexibility and convenience.
Not only can individuals with this type of degree work for businesses, but those who start their own business or enterprise could benefit from the knowledge they have gained, being more able to run their businesses effectively. Many individuals who are starting a small company will choose to at least take a few management courses or get an associates degree to help kick-start their career. Perhaps some will even choose to take a few classes to benefit their own personal finances. This is one area that we could all use a little more help in.
Finance is actually one of the most popular choices for those considering management degrees. This is a well paying job that is in high demand. While location, position, and experience will factor into ones salary, the average around the country is $75,000, not at all shabby. Many analysts and directors of finance will earn much more than this.
Financial analysts and managers play a crucial role in the financial market today, making predictions and giving advice concerning mergers and expansion projects. Getting a degree in financial management is sure to land you a steady comfortable job, and offer a lot of perks, helping you along even in your own personal life.