balance sheet

most of company only hire employee to analyzed profit and loss. But I think it is more important to analyzed balance sheet. Few of they key important asset that finance leader should continue to monitor is cash, sundry receiveables, inventory, account receiveables.

My advice: review your balance sheet quaterly with variance prior quarter.

Working on Holiday

Allot of people think nobody should work on holiday because the argument of work life balance. But in the current market environment we all need to be more flexible. This is important because with globalization and change in market lead us to make quick decision which require us to work on weekend and holiday.

My advice - It is always important for finance manager to meet timeline if you need to work on weekend and holiday please do so because your manager or shareholders expect you to accomplish your deliverables.

Plant and Equipment Investment

With current market condition in financial crisis and recession it very important for company to manage their cash position and maintain a strong balance sheet. Investor looking for less borrowing, with less borrowing company has less cash for investment, meaning Plant and Equipment budget will need to be reduce.

My advice - Cash is King, look at your balance sheet and reduce asset that does not generate revenue or productivity.

Commodity Price

When commodity price is high we are in inflation environment but when commodity price is down it not necessary we are in deflation environment. This is because when commodity price is down the end user product does not necessary be down this is because there are other factors contributed to produce a product. We see this impact now when price of metal is down but machinery and tools price is not coming down.

My advice - plan your investment ahead of prior year and place purchase orders in prior year this is important because you get more time working with your supplier for better price and quality.

Working with Direct reports

Today i got upset because something that my direct report misses out the payment. As a penalty my company need to pay extra payment. There will be a few problems working with your direct reports: -
1) Very common problem is communication - sometimes they don't understand the requirement it important for us as leaders to make it clear to them in writing and verbal.
2) They don't understand the important of the subject matter - most of the time we leaders are to busy handling allot of task and assign some role to our direct reports but it important for us to explain the important of the matter in detail and follow up with them.

Inventory

Inventory is good because it help to reduce the production cycle. But it is one of the most dificult asset to manage because:-
- very fast it become obsolete
- cash tie to inventory
- require storage
- worse case if you manufacture then it part of your wip and consolidation p&l need to eliminate the Inter-Company Profit.

My advice - Continue to look at turn and prepare aging by part number.

FX Impact

Just completed a conf call with my boss on FX. I attended a conference about FX and one strong participant refuse to accept any hedging strategy, because he fell any hedge is a speculation. But then another participant stood up and said hedging is like insurance, it is cover to mitigate risk.

My advice – You can blame the market on FX but realize loss is direct loss to your organization. Please understand your organization exposure and find the right strategy.

Non Profit Organization

Religion organization is one of the biggest non-profit organizations. In US Methodist church and Baptism church runners this non-profit organization like a company. In Malaysia churches, Buddhist and Hindu temples currently growing their organization. But they do not consolidate into single profit and loss statement of temples.

My advice – Temples and churches need to start consolidation and implement internal control

Document Management

Current environment is changing to have document in soft copy with increased storage space. But we are in finance need to make sure we have the right balance between soft copy and hard copy. The most important is our customers need to adapt to soft copy if we are changing.

My advice: Government agency still has limited capability of soft copy document, but we should find right company and outsource the document retention.

Communication is Key

Today was not a good day. I had a miss communication with my boss and we reported a different figure. Globalization is making communication more difficult. We in finance organization were asked to communicate more effectively by phone and conference call.

My advice: Use simple file to communicate and confirm back your understand before you end the call.