Finance to understand Contract

Finance manager should spend a good amount of time on understanding the contractual obligation. Don’t take thing for granted that previous finance manager would have reviewed through all the language behind the contract. You would be surprise to see the amount of issues you find through deeper.

Here are few contract you need to make sure you request frequently:-
- Building lease or rental.
- Transportation, Insurance and delivery term – this will impact revenue rec.
- Customer sales contract – this will impact operating margin

My advice – Read the contract together with finance reporting standard this goes hand in hand to make sure the accounting of this contract is properly accounted.

Mixing Finance with IT

Will there be one day where we don’t need finance managers and financial controller. The finance organization has come long way to reduce manual journal entry and process most of the transaction using IT system. But still most of the company need accountant to close their monthly, quarterly and yearly accounts.

Frequent changes in financial standard makes controller role more secured.

But with implementation of IT, finance department has taken addition responsibility on providing real time information related to operation in financial dollars. This has transform finance department to provide financial information before closing to operation team and reduce surprises.

My advice – Controller need to learn and understand company financial system and be smart to generate dashboards and matrix to reduce controllership risk.

5 ways for employee to focus during recession:-

• Stop working overtime because employee see you not productive and it addition cost for the business
• Stay focus and complete the given task on time
• Stop buying depreciating property
• Stop using credit cards
• Go back home on time and spend more time at home

10 Thing on how to handle during this recession time:-

• Focus on collection and not sales
• Buy inventory on consignment even if it cost more.
• Pay employees on-time because employees will work harder
• Reduce entertainment expenses with customers
• Help customer to reduce cost of ownership
• Get higher payment term with vendor even if it cost more
• If you are in service industries focus on turn around time
• Don’t hire any consultant ask your employees for better ideas
• Focus on tax planning to free up cash flow
• Lastly be the first to buy when things start improving