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The basis for building effective business management is the correct organization of the company’s financial system
Management of the financial system occurs in a cycle. If some link is not provided, the entire financial management system will suffer, and most importantly, the result
Conclusions, whether the results of the work correspond to the company’s goals.
Based on the findings, management decisions are made.
Planning the activities of a business lies entirely in the domain of management. The company’s management system should consist of a closed loop:
✓ Mission statement.
✓ Goal setting.
✓ Planning actions and appointing those responsible for their implementation.
✓ Execution of the plan.
✓ Results control.
✓ Analysis of the obtained results.
✓ Decision making.
✓ Adjusting the plan (goals).
If such a management cycle is not established, it can be said that there is no full-fledged management in the company. Company Goal is the future desired state of the business. A goal must be realistic, so that it can be adjusted, formulated, quantified, or objectively determined.
Strategy is a general business management plan to achieve the specified goal, which includes:
✓ Sales strategy.
✓ Marketing strategy.
✓ Supply management strategy.
✓ Financial strategy.
✓ Personnel management strategy.
Company Strategy is a comprehensive plan of action that describes how to achieve the company’s long-term and short-term goals. The action plan should answer the questions “what” we plan to do, “how” we plan to do it, and “who” can do it. Developing a plan of action “how” means how to accomplish this goal. This is the beginning of the description of the strategy for achieving the goal. First, we describe how it can be done. Then the “who” plan – who can implement this plan. Here we describe who, how many people, with what qualifications can do it. As a result, we must formulate an organizational structure that would fulfill the set goals.
Next, we divide our strategic plan into a long-term plan and a short-term one (for a year, for a month). The short-term plan is the company’s budget, on the basis of which the Company organizes its activities in the near future.
Each division has its own goal (subgoal): finance, sales, marketing, production, procurement, personnel. These sub-goals are developed on the basis of the general goal and are its component.
Financial strategy involves defining the long-term goals of financial activity and choosing the most effective ways to achieve them.
Evaluation of the financial strategy of the business is carried out according to the following parameters:
✓ Consistency of the Company’s financial strategy with its corporate strategy.
✓ Consistency of the Company’s financial strategy with foreseeable changes in the external environment.
✓ Consistency of the financial strategy with the internal potential of the Company.
✓ Internal balance of financial strategy indicators.
✓ Economic and foreign economic efficiency of the financial strategy.
Advantages of building a business strategy is increasing the efficiency of the company and its management.
Advantages of building a financial strategy – it gives an opportunity to assess whether the available resources and the achieved indicators of liquidity, solvency and other financial indicators allow to develop in the way described in the strategy.
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Our specialists with vast experience in implementing a strategic planning system in various companies will help you draw up an effective strategic plan, thus bringing your business goals closer to realization.
Budget is a quantitative reflection of the general plan of the company for a certain period of the following indicators:
✓ Use of financial, material and capital resources.
✓ Income and expenses.
✓ Cash flow.
✓ Attracting funding sources for current and investment activities.
✓ Capital investments and financial investments.
Budgeting is a management technology that is used to justify management decisions. It is also a business process of drawing up plans (budgets) and evaluating their implementation with further adjustment of both the plans themselves and, possibly, the set goals.
The main object of budgeting is business, as a type of activity in general.
The budgeting process is
✓ Financial management technology.
✓ The process of developing budgets according to the goals and objectives of operational planning.
✓ Component of financial planning.
✓ The system of coordination management of company divisions.
✓ The process of drawing up and implementing budgets.
✓ Resource distribution system between divisions.
✓ Budgetary control of the execution of budgets by areas and in general.
Budgeting is carried out on the basis of regulations. The regulation on budgeting approves the procedure for forming budgets, budget forms, Centers of Financial Responsibility, the implementation control process, etc.
There are two budgeting methods:
✓ Drafting of budgets based on the financial structure – according to the CFS.
✓ Compilation of budgets based on the allocation of business processes
The budget is a bilateral financial agreement between the company’s management and its divisions – CFCs (Financial Responsibility Centers), in which the amounts of income, expenses, amounts of payments and receipts are planned, as well as assets and sources of their financing secured under certain TSFs.
CFCs are approved according to the developed financial structure of the company, which is formed on the basis of the organizational structure.
By type of activity budgets are divided into:
✓ Operational.
✓ Financial.
✓ Investment.
Main financial budgets:
✓ Income and expenditure budget.
✓ Cash flow budget.
✓ Budget according to the balance sheet.
Financial budgets are built on the basis of operational approved budgets by consolidating data.
Main operating budgets: sales, purchases, warehouse and transport logistics, production, advertising, management, etc.
Investment budgets are company development projects. Example. Costs for opening a new branch or purchasing and implementing new software, ERP systems.
Budget control is the process of comparing actual results with budget ones, analyzing deviations and making the necessary adjustments to the budgets of subsequent periods. Theoretically, after the final approval of the budget, planned revenues should be received, and planned expenses should not be exceeded.
Key performance indicators or KPI are developed to measure and evaluate the results of the company’s activities and each division or CPF, as well as to achieve the company’s strategic goals.
Advantages of implementing a budgeting system:
✓ The possibility of conducting a financial analysis of the company’s activities.
✓ Strengthening financial discipline aimed at achieving the company’s financial goals.
✓ Planning and making managerial decisions.
✓ Tool for calculating the need for financing.
✓ Standardization of the use of company resources.
✓ Pricing Guide.
✓ This is a guide and a foundation for building high-quality management accounting.
Our specialists with extensive experience in implementing the budgeting process in various companies will help you develop an effective budgeting system.
International Financial Reporting Standards (IFRS) is a set of standards based on the principles of financial accounting and approved by the International Accounting Standards Board.
Harmonization, adoption and use of IFRS in each country ensures:
✓ Reduced risk for creditors and investors.
✓ Reducing the costs of each country to develop its own standards.
✓ Deepening international cooperation in the field of financial accounting.
✓ Unequivocal understanding of financial reporting and growing confidence in its indicators worldwide.
Accounting policies are certain principles, frameworks, rules and practices adopted by a company for the preparation and presentation of financial statements. The company must apply, first of all, those approaches and methods of accounting and providing information in financial statements that are provided for by IFRS.
General requirements for financial reporting according to IFRS contains:
✓ Purpose of financial statements.
✓ Qualitative characteristics of the information provided in the reports.
✓ Definition and procedure for recognizing elements of financial statements.
Accounting (financial) in Ukraine is conducted in accordance with the law of Ukraine “On accounting and financial reporting in Ukraine” and in accordance with the National regulations (standards) of accounting.
Organization of accounting at the enterprise:
Issues of accounting organization at the enterprise belong to the competence of its owner (owners) or authorized body (official) in accordance with the legislation and founding documents. Responsibility for the organization of accounting and ensuring the recording of the facts of all business transactions in primary documents, the preservation of processed documents, registers and reports for a set period, but not less than three years, is the responsibility of the authorized body (official) who manages the enterprise, or the owner, respectively legislation and constituent documents.
Accounting and financial reporting are based on the following principles:
✓ clarity;
✓ relevance or relevance;
✓ reliability or validity:
✓ true representation;
✓ priority of content over form – information should take into account, first of all, the economic substance of the facts of business transactions, not the legal form;
✓ timeliness and others.
Benefits and use of IFRS today:
✓ As the basis of national requirements for financial accounting in many countries of the world.
✓ As an international basic approach by those countries that develop their own requirements.
✓ Stock exchanges and regulatory bodies that require or allow foreign issuers to submit financial statements in accordance with IFRS.
✓ European Commission.
✓ More and more companies in the world.
Our specialists have extensive experience in implementing IFRS and transforming national standards into international ones in different countries. We will help you build financial accounting in accordance with the IFRS or a system of transformation from national to international standards. Also, we will help to set up the technical task and automate this process.
The purpose of management accounting is to provide operational information to management of all levels within the company for planning, management, analysis and control of activities.
Features of management accounting:
✓ Internal user oriented.
✓ Information obtained from management accounting is confidential.
✓ Can include not only financial indicators, but also non-financial indicators:
• Quality indicators;
• Time indicators.
• Innovation;
✓ Includes the assessment of the activity of both the company as a whole and each Financial Responsibility Center (FRC).
✓ Reporting forms are flexible and can be changed as needed.
✓ Analytical features are aligned with company budgets so that data can be matched and analyzed;
Tasks of management accounting:
✓ Provision of all necessary analytical information and reports for decision-making and performance control at different levels of management;
✓ Effective implementation of price policy;
✓ Cost reduction and optimization;
✓ Analysis and reduction of non-financial indicators. For example, the time of ordering and execution;
✓ Implementation of a single company information system at the ERP level;
✓ The maximum automation of all business processes and obtaining high-quality credentials will become the basis of the company management process;
✓ Management accounting data and reports are the basis for planning and forecasting activities for the future, organizing the budgeting process;
✓ Organization of internal control of business processes, implementation of regulations, movement of company assets;
✓ Timeliness and reliability of management reports;
✓ Preparation of the accounting policy, which describes the accounting rules of analytical data of all financial institutions and the formation of relevant reports;
✓ Determination of duties and powers of employees who will keep records and generate reports;
Advantages of implementing management accounting in the company:
✓ A report or management accounting data can be obtained promptly for decision-making or analysis;
✓ The volume of information is sufficient and reliable for decision-making;
✓ The results of the work of all divisions or TFS are displayed, which systematizes the company’s management process;
✓ Allows to bring business to a new level of development.
Our specialists, with extensive experience in implementing management accounting systems in various companies and types of activity, will implement the optimal management accounting system for your business.
Internal control system are measures implemented in the Company with the aim of the most effective functioning of all business processes and quality performance of their duties by all employees.
The implemented internal control system will help the Company move to the next higher level of organization and business management.
The main functions of the internal control system:
✓ Control.
✓ Informative – analytical.
✓ Methodological and consulting.
Creating an effective internal control system aims to:
✓ Providing business with reliable information.
✓ Ensuring the preservation of assets.
✓ Ensuring the protection of information.
✓ Ensuring the efficiency of economic activity.
✓ Ensuring compliance of accounting with the accepted accounting policy.
✓ Identification of unused internal reserves of the Company.
✓ Increasing the efficiency of business processes.
✓ Improvement of risk management, control and corporate management processes.
✓ Ensuring compliance with adopted internal norms, regulations, methodologies and external laws, standards, etc.
Advantages of implementing an internal control system:
✓ Increases investment opportunities by improving the quality of financial reporting.
✓ Helps effectively manage the Company’s assets.
✓ Helps to implement a rational pricing policy.
✓ Helps the owner control the business activity and its compliance with the set long-term and short-term goals.
✓ Helps to prevent possible risks of losing business, receiving losses, losing assets.
Our specialists, with extensive work experience, will help you implement a high-quality internal control system for your business and maintain its operation.
The main tasks of the financial director:
✓ Formation of the organizational structure of the financial department, personnel selection;
✓ Organization of the planning process (budgeting) in the company according to the best international practices;
✓ Organization of the budget implementation control system;
✓ Preparation of necessary regulations, internal documents;
✓ Organization of financial and management accounting;
✓ Preparation of accounting policy;
✓ Organization of internal control of movement of cash, other assets;
✓ Management of the automation process of the company’s business processes;
✓ Implementation of software, ERP systems;
✓ Operational management;
✓ Company expense management;
✓ Organization of the process of preparation of financial and management reporting.
Benefits of CFO outsourcing:
✓ Your financial service will be managed by a highly qualified, experienced specialist;
✓ The opportunity to build a financial management system at the highest modern level;
✓ Prompt response to all issues and processes in the company.
Our specialists with extensive experience of working as financial director in various companies will perform the function of financial director in your company.
The better all the Company’s processes are formalized, the easier it is to implement the software in the Company, to evaluate the performance of various areas and in general. Formalization is the process of preparing internal regulatory documents.
Creating a system of effective company management is one of the most difficult tasks facing management. One of the methods of effective management is a process approach or business process approach.
Business processes in the field:
✓ Marketing.
✓ Purchaser.
✓ Production.
✓ Storage.
✓ Sales.
✓ Transportation.
✓ Financial management.
✓ IT Management.
✓ Personnel management, etc.
The process approach of company management is more effective from the point of view of competitiveness. The use of the process approach significantly changes the logic of the organization and the management mechanism.
The business process includes:
✓ Process Owner.
✓ Process technology.
✓ System of process indicators.
✓ Process control.
✓ Process resources.
In order to identify business processes and manage them, it is necessary to define the process and describe it qualitatively. Namely:
✓ Formally describe the business process with definition of its boundaries.
✓ Determine the results of the business process.
✓ Determine the resources used by the business process.
✓ Determine indicators of efficiency and effectiveness of the process.
✓ Determine methods of measuring process indicators.
Advantages of implementing business processes in the company:
✓ Increasing the efficiency of company management.
✓ Improvement of the budgeting and activity planning system.
✓ The owner of the business process is responsible for the final result, and not for a separately performed function, as well as for the resources used within the entire business process, and not for its separate part.
✓ A new approach and a new structure of company management are being formed.
Our specialists with extensive work experience in the analysis, development and implementation of business processes in various companies will help to build an effective management process approach in your company.
Software plays an important role in modern company management. Businesses no longer use accounting programs that solved accounting issues. Currently in use
ERP (Enterprise Resource Planning) – systems are complex management, accounting and control of the company, this is the planned management of company resources. Information and documents are entered at the workplace where they originated. And the person from the department that carried it out is responsible for the business transaction. (No one carries mountains of papers to the accounting department). Accountants double-check the entered information, calculate taxes, generate reports, and can perform the function of internal control.
Financial Due Diligence is a detailed analysis of the financial condition and organization of the company’s financial system.
Due diligence can be carried out in connection with the purchase of a company or restructuring, as well as before signing a contract or starting cooperation with a company.
Financial Due Diligence will include but not be limited to the following procedures:
✓ Analysis of the strategic long-term planning system.
✓ Analysis of the budgeting system.
✓ Analysis of the Company’s budget implementation control system.
✓ Analysis of the Company’s organizational structure.
✓ Analysis of each workplace that forms any document or report, according to its duties and functions.
✓ Analysis of all software used in the Company.
✓ Analysis of all reports prepared by employees.
✓ Analysis of the accounting accounting system (Any programs used, including Excel, Word).
✓ Analysis of accounting, including analysis of production accounting.
✓ Analysis of the management accounting system (Any programs used, including Excel, Word).
✓ Analysis of management accounting, including analysis of production accounting.
✓ Analysis of management reporting.
✓ Financial analysis of financial and management reporting. Calculation of the system of indicators that characterize the Company’s financial condition.
✓ Analysis of the system of cost calculation and cost rationing.
✓ Analysis of the system of internal control of the movement of assets (money, raw materials, products and other assets of the Company).
✓ Compliance analysis with adopted internal norms, regulations, methodologies and external laws, standards and internal control system and all business processes of the company.
✓ Risk analysis.
✓ Conclusions based on the work done.
✓ Preparing the report.
Advantages of conducting due diligence is having the necessary information to make a decision.
Our specialists, with extensive practical experience in conducting company analysis, will conduct due diligence according to your task and prepare a detailed report.
Organizational structure is a collection of certain divisions of the company, which are created to fulfill and control certain goals and tasks of the business.
For the normal functioning of the company and the full management of its activities, it is necessary to form such an organizational structure that would allow for effective business management.
The organizational structure of a business must ensure the performance of two main functions:
✓ Carrying out (conducting) business.
✓ Business management.
The organizational structure of the company is determined by the principles of management of its units, forming the hierarchical structure of the company:
✓ Management by running functions.
✓ Management by composition and structure of units.
For successful business, the organizational structure of the company must ensure:
✓ The possibility of doing business by implementing business processes.
✓ Management of business processes.
The process of forming an organizational structure includes:
✓ Formulation of company goals and objectives.
✓ Formulation of goals and tasks of units.
✓ Development of activity regulations, document flow.
✓ Development of business – company processes.
✓ Development of the composition of subdivisions and connections between them.
✓ Calculation of the design number of subdivisions.
✓ Calculation of management costs and performance indicators.
✓ Development of employee rights and responsibilities maps.
For the financial evaluation of the activities of the subdivisions, a financial structure is created based on the organizational one.
Financial structure of the company is an accurate description of the company regarding the structure of income and expenses, as well as in terms of the structure of its sources, with the distribution of powers and responsibilities.
The financial framework is used to:
✓ Creation and consolidation of budgets, their display by centers of financial responsibility.
✓ Determining the limits of financial responsibility of the company’s divisions.
✓ Formulation of accounting centers in management accounting.
Benefits of creating an organizational structure:
✓ The organizational structure provides real business management, which allows you to effectively respond to both changes in market conditions and internal changes related to the fulfillment of the company’s strategic goals.
✓ A properly formed organizational structure will allow to better fulfill the set goals and the company plan, as well as ensure the control of their implementation.
✓ A properly formed organizational structure will allow to better build the budget formation process and control its implementation.
✓ A properly formed organizational structure will allow to better build management accounting and the formation of management reporting of the company.
Our specialists with vast experience in the analysis and implementation of organizational structures in various companies will help you to form the correct and effective organizational structure of your business.
Business plan is a description of a business idea or a business dream. Our main task is to help turn your business dream into reality. A business plan is a program of actions for the future business. It is necessary to think through everything in detail, translate your vision into the language of finance and business, form a strategy and evaluate it.
We start work on the business plan by signing a confidentiality agreement. This is done so that you can be sure that your business idea and business plan data will be used exclusively in your interests and for you.
The structure of the business plan consists of:
1. Summary of the project. Where we describe the essence of the project. Features of the project, how you plan to achieve the goals of the project, what financial result we expect. Amount of funds raised, etc.
2. History and position to date:
✓ How to start your business
✓ A description of your business. Full characteristics of the enterprise. Choice of legal form of ownership, taxation system
✓ If it is a production, a description of the process and the product being produced
3. Market research
✓ Customers
✓ Competitors
✓ Market research plan
4. Competitive business strategy
✓ Prices
✓ Advertising and Promotion
✓ Location and distribution etc.
5. Organizational plan
✓ Business structure, i.e. which businesses will enter your business and with what functions
✓ Organizational structure: number of people, what qualifications, with what functions
6. Prediction of results
✓ Sales Plan
✓ Estimated balance
✓ Forecast statement of financial results
✓ Cash flow forecast report
✓ Break-even analysis
✓ Project payback estimate
✓ Analysis of funding requirements
7. Organization of the system of internal control of the execution of the business plan
8. Environmental protection
9. Description of project risks
Advantages when drawing up a business plan:
✓ Identifying the strengths and weaknesses of the business
✓ Investor and shareholder support
✓ Assessment of business risks
✓ Analysis of new reserves of cost reduction and revenue increase
✓ Analysis of business expansion opportunities
✓ Analysis of possible sources of funding for the project
We will execute a business plan taking into account the requirements of an organization or an investor who is ready to invest money in your business, as well as based on the best international practices. We can also take part in protecting the business plan before investors or other institutions that provide funds for business development, as well as attract funds for your business and help implement your business plan.
Assessing the state of the organization of the financial system of your business
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Assessing the state of the organization of the financial system of your business
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