Working Capital is a notion that business owners and managers need to come to grips with and manage effectively in order to ensure sustainability. Maintaining healthy working capital provides a safety net to absorb possible bad debts, for example, and may be critical if you need to apply for a business loan. It is also […]
‘Working capital’ is a notion that many business owners are not familiar with. It seems difficult, complicated, so many prefer to just ignore it. But it is important and it does not have to be complicated: It can be put in simple words. I agree that the definition in Wikipedia is not easy to follow: […]
The end of Financial Year approaches and most businesses would typically be planning and organising their annual stocktake. Other companies may do one or several interim stocktakes during the year in order to better monitor their inventory and/or minimise the disruption of a full stocktake. A stocktake is the verification of the items physically held […]
As a consumer, we all love to receive discounts when we purchase. The same goes when buying goods or services for our company. But discounts have a strong impact on the business and its Gross Profit (also called ‘Gross Margin’): Discounts received trigger: Increase in Gross Profit Increase in Profit before Tax Discounts given can […]
Cash is the lifeblood of any business, large or small. When cash runs out, the business goes bust: Ansett, Babcock & Brown, Centro, HIH and OneTel are some of the famous names that went belly up. Thousands of businesses do the same every year, for the same reason. All bankruptcies are not avoidable: Sometimes the […]
Customers (also called clients in some industries) are the basis of your business: No customers = No business. So why not find out what they think, what they like and what they dislike? Customers’ views and opinions are very critical to business success. Research shows that organisations that listen to their customers enjoy more success […]
‘Cost’ and ‘Control’. Two words that individually do not usually enthuse the masses… Very few people get inspiration from the two words put together. ‘Cost Control’ can be described as the activity of controlling costs within a process, within a project, department, division or company. Cost Control needs to be carefully managed: Yes reducing costs […]
What is a Capital Expenditure? What financial and tax effects does it have on the business? Is it an expense? Does it affect the cash flow? Should it be budgeted? Where does it show in the Financial Accounts? Capital Expenditure (Also known as “Capex”) is an expense that will create future benefit to the business. […]
Any business needs a Budget to foresee where it is going on a financial point of view. Running a business without a budget is like flying a plane without calculating how much fuel you need to get to your destination: You might be lucky, but you also have a large probability of crashing! A budget […]
Well, this is this time of the year again… We have officially entered winter time, end of the Financial Year sales have started and the Reserve Bank of Australia (RBA) has cut the official cash rate by 0.25% to 3.50%. This is the fourth cash rate cut in the last seven months and the cash […]