Category Archives: Corporate Finance

Basic Financial Management for Entrepreneurs

 

Entrepreneurship is more than just starting or doing a business, it is coming out with a new idea, venturing into it and laying the foundation for the business set up. Entrepreneurship is donning various hats and becoming the master of it. If your business is in the baby stage where funds are low but demand is high you may have to engage yourself deep into managing finance in a better way so that you have control as well as an idea of where your money is being spent or being blocked.

The initial capital to start up a venture and then having necessary funds to finance the working capital which is required for smooth running of business are the two most aspects of financial management for entrepreneurs.

Entrepreneurs should basically give impetus to their equity and debt capital. It is essential to repay debts on a timely basis without any delay in order to convince creditors of smooth functioning.

Further, fixed assets should be financed only out of long-term funds to avoid corrosion of capital funds. Equity capital is the costliest form of capital for any business. The demands of dividend and growth are sky high requiring entrepreneurs to give satisfactory quarter and year end results that generate returns for the shareholders. For businesses that are funded by venture capitalists it is necessary that their share of return is provided for promptly in order to sustain investments and capital.

Further expansion plans cannot be charted out with the help and support of venture capitalists. Entrepreneurs should also train themselves in managing their organization’s finance in order to ensure that the economic resources are best used. Few do’s for entrepreneurs are saving funds for the future expansion, to allocate funds to ensure job security of employees and the firm and few don’ts are over pricing, rapid expansion, paying more salary than what the work is worth for and such.

 

Corporate Financial Management

 

Finance is the bloodline of any business. It provides the necessary funds and working capital for purchasing raw materials, buying plant and equipment and for paying wages or salaries. It is essential for every enterprise to have a corporate financial management team or department which can control and carry out the financial operations of an enterprise smoothly. The department should have controls for payments, receipts and other financial outlay which are usually required during the ordinary course of business. Further, they should also be prepared to incur additional expenditure which was not estimated for in the budget allocations.

As a part of the corporate financial management process an enterprise should have various controls for calculating total cash flow, funds requirement for the immediate quarter, working capital requirements, ratio analysis, etc. These financial tools enable a company to organize its finances in a better way and plug all possibilities of revenue leakage. Further, it will also help in identifying situations where better financial control can be exercised for maximizing revenue returns. Corporate financial management is not a task that any amateur can take over and complete. It requires the exercise of expert knowledge and experience which comes only with academic qualifications and practical experience. That is why in Business owners prefer to have Certified Financial Experts as Financial Consultants to audit and monitor the entire end to end financial process.

In today’s business world, how complicated and complex be the business process it can be easily managed with the help of technology. With the aid of technology Corporate Financial Management has become an extremely easier task, there are several ERP software, financial statistical tools and Billing & Accounting systems that comes with separate module for Finance management which can be used for all sizes of businesses to manage to their short term and long term finance.