finance for non financial personnel - part 7
TRANSCRIPT
Finance For Non-Financial Personnel Part 7Business Driven Finance Insights For Laymen
Valuables Take Away
£ ¥ € ₳ ₨$The Structure of Finance For Non-Financial Personnel
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8 presentations altogether, if you cannot find all the links, kindly email [email protected] to request
Part 5
Part 6
Part 7
Part 8
Accounting systems - the systems are not that simple after all and how your own system integrates to them. Accounting systems are not IT systems!
Estimation - any activity (you name it) involves estimation, how can you estimate better? Budget/ Forecast/ Plan. How the financial data so important to you? Lean & agile.
Valuables take-away - how to work on numbers that please your boss? What numbers must you always look at? The hidden financial formula a boss must have.
Decision making - interpret financial information, perform critical ratios analysis, read different reports, and use reports for specific needs. Use management accounting information for your own management needs.
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VALUABLE take-away
“know how your actions affect the
financial numbers”educational: free distribution
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You don’t beg your boss to
climb to the topYou PLEASE HIM!
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You need to understand your BOSS in order to PLEASE HIM!
How to understand your boss?
1. Obtain skills to read his mindor
2. List typical needs of a bossnote: please email to [email protected] for detail of the above 2 methods.
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One point in the “A List of Boss's Typical Needs”
I know what financial numbers will make the boss
happy And I will act accordingly to affect those financial numbers
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Finance Success Formula
This should be what a boss is looking for in the financial information?
(Free cash flow - capital charge)/ Capital Employed = Economic Value Added
Find hard to comprehend?
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Finance Success Formula
This should be what a boss is looking for in the financial information?
(Free cash flow - capital charge)/ Capital Employed = Economic Value Added
Find hard to comprehend?
Why not focus on one
first?
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Finance Success Formula
This should be what a boss is looking for in the financial information?
(Free cash flow - capital charge)/ Capital Employed = Economic Value Added
Find hard to comprehend?
Why not focus on one
first?
How can we track
this everyday?
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Financial information a boss
need to know to make DECISION
Sales & profit
made by per worker each day
net cash generated from per worker
each day
net cash generated
at the company level each
day Free cash flow
against ROCE
each day
Compare with
target each day
Where the
workers is the key
driver
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A Simple Approach Is To Know How You Contribute Today?In this way, you know how to adjust your activities daily.
How Are You Related?How your activities lead to
sales or profit?
How that
lead to cash flow?
Can you trace to
free cash flow?
Can you trace to
cash conversion?
Profit ≠ Cash
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From The Boss’s View Point
Therefore, financial numbers one of the critical factors to appraise performance. If an employee is able to make positive contribution to the financial numbers daily, his performance is obvious and easy to evaluate!
In S/T, some non-financial information may impress the boss.
However in L/T, financial information affects the boss decision - because it is the most completed business information.
Boss without good financial knowledge may under/ over rely on financial numbers to make wrong decisions.
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● You know how to “Please” and “Not Plead” Boss
● You know the importance to update financial numbers on
a daily basis to ensure timely monitoring
● You know how each activity makes contribution daily
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Are You On Track?
Look For Next Presentation: Finance For Non-Financial
Personnel - Part 8
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8 presentations altogether, if you cannot find all the links, kindly email [email protected] to request
All the 8 presentations are the overview, PLEASE email us if you like to get more benefits from them.