Financial Management


The success of a business depends greatly on the business leader’s strong and responsible financial management. This financial management can be broken down into two main components:

– Internal financial planning.
– External financial planning.

Internal Financial Planning

– Costing: the business leader must classify the existing expenses of the business into two categories – variable expenses and fixed expenses. Using this data the total cost per product/service offered can be calculated. This is not a simple process and many business owners do not prioritize it.

– Cash Flow Management: the business leader must prepare a chart of all anticipated income and expenditure for the next time period, and then monitor cash flow closely in order to avoid unnecessary anomalies in the company’s bank account (see more
details in the cash flow extended document).

– Budget Planning: at the beginning of each calendar year the manager must plan a fixed schedule for the year ahead, with assessment of income, required investments, increases in working capital and any other additional factors. Any business will struggle to grow and advance toward set goals without an organized budget plan.

External Financial Planning

– Working with the bank: Any business leader is required to be in continuous interaction with their bank, monitoring the interest being charged, commissions paid by the business, and ensuring the bank understands the company’s credit needs. This is not a simple interaction and can open lead to the business being at a disadvantage, while the bank controls the situation and ends up over-charging the business.

– Financial conduct with suppliers and customers: The business is required to give credit to customers according to a pre-assigned policy – current common credit terms are between 30% and 120%.

– Payment terms: There is a constant negotiation with suppliers in relation to payment terms. The stronger the business is the higher the suppliers’ credit limit will be.
Financial conduct in relation to customers and suppliers directly affects the company’s funding expenses and its cash flow. Thus it is vital to carefully develop the policies detailing the credit terms the company is willing to offer and those it wants to receive, in order to optimize business growth.

Segment Y G Business Development Ltd adding value in business development

After an initial meeting Segment Y G Business Development Ltd will closely monitor the businesses’ financial interactions and carry out a preliminary assessment, where our financial consultants will try to understand the needs and evaluate the current state of the business.

Later, in full cooperation with the business leader, we will plan and manage all the financial elements formerly mentioned: producttiservice costing, steady cash flow
management, building a budget, interaction with the banking system, and finally calculating the businesses’ working capital.