VIEWSLETTER SEPTEMBER 2012
IN THIS ISSUE ¬ New Year ¬ Balance(d) Sheet ¬ Whom to listen? ¬ The law that has the widest jaw
THE NEW YEAR
a viewsletter from
PRIME insights ...month after month
PRIME FACTOR ..transforming businesses
THE YEAR ENDING 2012 BALANCE(d) SHEET The character of a business is in its accounts. What the world can know about a business is in its financial statements and management report. It is no wonder that successful businesses all over the world attach much importance to their preparation, presentation and statement of facts. Leaving aside the materiality and the reality that it can reveal, the fact of its importance needs no emphasis.
VIEWSLETTER SEPTEMBER 2012 If all along one had thought otherwise, let this financial year end be a bold starting point to clean up the statements and make it a part of the business philosophy to state only that is correct. A few tips towards this as below may be worthwhile in this effort: ยง Take responsibility to its preparation. ยง Do not compromise - Face the truth. ยง Take it as a chance to announce to the world your
ability in its true form.
How many businesses can boast of stating only the facts and truth in their balance sheet even if they know their importance to their advantage at large.
ยง Good or bad - it is the truth that one likes in others. ยง Do not operate the law - Cooperate.
This article focus is just to re-emphasise the need to be perfectly clean and pure in representing the facts.
If it is too much at one go to effect the changes, make the maximum this year and consciously keep in mind to make it absolutely clean form the next year.
It sometimes makes one wonder if a change of name to FACT SHEET from BALANCE SHEET could change the attitude and serve as a reminder towards this important business document.
More on the subject and their benefit would be covered in the next issues.
A balance sheet is not a sheet of paper with figures. It is the statement of the financial position of an enterprise on a date. Obviously, the least it should be is a true statement of the actual financial figures so that they give a summarised position of the activities of the business in a concise and readable form. It first helps the business than others and anything other than facts in it, would make its use that faulty. Business owners may well say that they are not experts in the preparation of the financial statements and rely only on their CA's and accountants. This stand holds no water as far the stating of the facts is concerned. No businessman can say he does not know how much he owns and how much he owes and this precisely is the balance sheet is all about. Truth is bitter as the proverb goes may apply to other situations in life but I consider that as sweet in financial statement since that only would be liked by others and also help the one who makes it.
INSIGHT The theme for the month is aptly chosen to highlight how the year ending of March 2012 ends for most small and medium businesses only in September 2012. Is it the laziness of the business owners or the preoccupation of the auditors? Both blame each other. It is a every year ordeal promised to be corrected from the next year. May be the present system of accounting just to tally and not for management of business could be a prime reason for this. It is high time the business owners realise the waste of time and opportunity by delay in this simple and important yearly ritual and complete it well before April instead of stretching it to September. BENEFITS OF EARLY COMPLETION: Banks support proposals that are accompanied by audited statements. Investors like the commitment of the business owners to their financial statements if prepared well in time. Planning for the current year is better if these statements are over well within April. More are the benefits if year ends of businesses is ended well before May begins.
THE MENTOR CORNER WHOM TO LISTEN? Economists are rarely right. They are either over optimistic or over pessimistic. Growth rate, recession, slow down are terms often used by analysts and non-business men. If we see the background of companies from their balance sheets, you would be surprised of these claims and noises. When common sense is applied, you would well be surprised to see the reality with absolute clarity.
VIEWSLETTER SEPTEMBER 2012 If you are perplexed, talk to somebody like PRIME FACTOR. You may gain clarity and guidance and a good dose of confidence based more on reality than on mere guess work and statistics.
INSIGHT - Finance for business Money others have for you if you have your mind to give to them. Business needs money all the time. Business needs customers all the time. Alongside the above, the business needs your mind in it all the time. What you can give is your mind, make or take money and serve your customers who actually deal with you rather than your product or service. Money can be seen, customers can be shown. What about your mind? How do you show your mind and how your mind will be seen by others? Your mind is shown by how you manage your business and your team, handle your customers, honour your vendors, legal compliance, accounting and records maintenance and how you manage your existing bankers and investors.
You care about what is happening to your customers. You keep improving your product and services. Take every negative feeling as a heater to your desire and charge yourself to know of your product better and serve the customer. Indian can never face a recession. There are enough people and more than required money with the individuals than the Government. Better give your deaf ears to any negative news. Hear to your inner voice and your gut feeling. Also hear to those who can motivate you and give you confidence with authority and compassion. THERE IS OPPORTUNITY SO LONG AS YOU HAVE SOMETHING TO FULFIL HUMAN NEEDS. Sense would be to look at events and circumstances that affect you and understand the direct effect of every such event and happening on your business. May be nothing at all or something that requires a little tuning and tweaking. Just do that !!!
All things that mean business, matter in business. Those well organized are easily recognized and those not, are very easily ignored. With no need to emphasise that one should be, if one can reflect himself with.
THE CAUTION CORNER
VIEWSLETTER SEPTEMBER 2012
Success need not be always Failure will not be always
THE LAW…that has the widest JAW
If you are in the game Always
Laws are essential to a civil society and we are part of it by default. There is nobody an exception. Unfortunately, over the years the numbers of laws have gone so such in number that we citizens are bound to follow whether we like it or not. That is about the state of affairs, worth only repenting. But the real side, we have no choice except to strictly follow, liking or otherwise. Innocence, ignorance and many type excuses are of no use when faced with legal action and this is what one has to keep in mind to ensure his safe and stress free living in the society. In business, this is the most important aspect that needs the utmost respect from all those you associate with. Not enough you comply with the laws, you must also make sure you deal only with those who follow the laws and rules as much as you are supposed to. Keep in mind, everyone would only preach the other, the values in law that he cares a damn about. So, taking the excuse that others do not and why only me, does not help at all. Hypocrites preach and sycophants praise. Do not fall prey. Make sure you be and remain law abiding to the fullest extent. Chances are that you may not know the laws that you are violating or not following in its letter and spirit. Yet, a focus on this discipline should help you comply with most of the laws over a period and could be a face saver in any eventuality of being caught for some negligence. It would not be exaggerating, if you conduct a periodical audit of your compliance to make sure you are safe and protected legally to enjoy doing your business free of tension, anxiety and worry. Remember the following: § Laws are not to swallow but to follow. § Compliance is cheaper to defiance.
What to look for in future issues? Simple formulae to cash management Methods to overcome business blocks Financial sources for small businesses Accounting standards for small businesses
In Your Interest
Prime Factor Business Solutions P Ltd 2-Alcazar, 11/1, Infantry Road Cross, Bangalore 560001 TelFax:080-41238690 Email:email@example.com URL:www.primefactor.co.in