Financial management and the yes man

Financial management and the yes man

Yes man, we need discipline On the matter of the man who became Finance Minister for a day, the talk on the street is that he is a “yes” man. Every political commentator who writes on this subject, supports the opinion that the last thing this country needs at this point in time, is a yes man. Growth is down, unemployment is up, government spending is out of control, and corruption is widespread. What this country needs is financial discipline, and you will not get that with a “yes” man. Financial management, you won’t always receive a yes Similarly in business, in order for a company to thrive, the chief executive needs a financial executive who challenges him. He needs someone who is prepared to second guess him, someone who is prepared to point out the financial and tax implications of that creative idea, even if it means raining on the parade ground. Every successful chief executive needs a strong financial manager on his team. I wrote before about how the successful industrialist, Andrew Carnegie, prided himself on the fact that he surrounded himself with clever people, and he listened to them. Outsourced financial management, rescue can mean no Whether you are hiring a full-time financial executive or utilising the option of outsourced financial management, do not fall into the trap of settling for the person who you think will not challenge you, someone who will only tell you what you want to hear. Furthermore, do not underestimate the importance of the financial manager as a key player in your organisation. It is not a coincidence that most of...
Government needs Financial Management

Government needs Financial Management

Financial management, and our government The axing of the South African Finance Minister has been widely met with disbelief. At no time, in recent history, has the country been more in need of competent financial management and financial discipline than now. Speculation is rife regarding the reasons for the replacement of a minister, who has served with two previous finance ministers, with someone who, by all accounts, is comparatively inexperienced and incompetent. Whatever the reasons were for this ill-judged decision, the consequences will undoubtedly be dire for the economy, and for the country and its people. white space It can wait Similarly, in business, there are many reasons why business owners neglect the issue of having competent financial management. Some reasons revolve around avoidance of compliance costs, while others pertain to the perceived cost of a financial manager. The cost of financial management is often seen as a grudge expense. This is now white space Financial Management, is it that important? Like our real-life example above, if avoidance is the issue, it will catch up with us at some stage, and the consequences of avoidance will prove far more expensive than the cost of compliance itself. If the cost of having a full-time financial manager is deemed prohibitive, or excessive, there is the option of outsourced financial management, which gives the business-owner the option of retaining the expertise of a financial manager to the extent that it is required. Financial Management- Outsource it At Leaders Business Solutions we offer Outsourced Financial Management solutions, in addition, or along-side, back end office support services to alleviate your Financial Management and other management issues. this is white...
Tax Compliance – does SARS make it more difficult?

Tax Compliance – does SARS make it more difficult?

DISCOURAGING TAX COMPLIANCE The other day I had to go to a branch of the South African Revenue Service to hand in a certified copy of my identity document. The alternative to handing the document in is normally to upload the document on e-filing. However, for some inexplicable reason, this facility was not made available to me. I stood in a queue at the SARS office waiting to state my business to the receptionist, after which I was told to take a number. A notice board in the reception area stated that the waiting time was four hours. When I queried this with the receptionist she replied “Wherever you go you have to queue”. The gentleman who handed me my number confirmed that I would indeed have to wait four hours to be attended to. Four hours to hand in a document! That’s half a day of production lost to the economy. Tax Compliance – does SARS make it more difficult? I looked at the people waiting patiently for their number to be called, there must have been at least two hundred of them, individual tax-payers, book-keepers, financial managers, tax consultants, business-people.  I marvelled at their dedication to tax compliance. Then a thought occurred to me. Why is SARS not doing more to encourage tax compliance? Why are they not making it easier for people to comply? Indeed, why are they not rewarding the compliant tax payers in this country? In the current economy our tax revenues are down, so we should be making life easier for tax payers, not more difficult. Modern times are not so modern We...

The Money Trap

The Money Trap I once met a successful business lady through a business association. Her company had secured some large clients and apparently was doing well. She was enjoying the trappings of wealth, beautiful clothes, a fancy car, a house in an elite Sandton suburb. She used to attend industry meetings on a regular basis. One day she stopped attending meetings. I later heard that her business had closed down. I subsequently learnt that she owed many millions of Rands to the South African Revenue Service. I was surprised to hear this, as she sat on industry committees and discussed matters of ethics and compliance on a regular basis. I concluded that her non-compliance in tax matters was a matter of ignorance. Outsourced Financial Management – it was an option Knowing what little I do about her company, I have concluded that she could not justify a full-time resource such as a qualified financial manager. She paid the price dearly for not having access to this vital resource. The irony is that she could have made use of an outsourced financial manager. That way she could have had part-time access to the knowledge and expertise required to ensure tax compliance, as well as the on-going financial well-being of her company. Utilising outsourced financial management allows one to tailor the service to their particular needs. One person may need access to the financial management expertise on a weekly or monthly basis, another person may need the outsourced financial manger to supervise their bookkeeper, while yet another may wish to outsource the accounting and payroll function entirely. Too many business people...

Financial Management and the Economy

Economic growth? The economy grew by a mere 0.7% in the third quarter of this year after contracting by 1.3% in the previous quarter. As a result, overall growth estimates for 2015 have been revised from 2.3 % down to 1.2%. This would make it the lowest since the 2009 recession, and less than half of the twenty year average of 3.2%. Make or break formula How can the government improve the financial management of the country’s economy? According to the Sunday Times, the Goldman Sachs MD for sub-Saharan Africa, Colin Coleman says that the current combination of high unemployment, low growth and rising interest rates is a dangerous combination for the economy. He recommends creating a group of economic ministers who are centrally driven around the objective of growth and development. He also advocates the creation of an advisory economic council including captains of industry, trade unions, civil society leaders and economic ministers. Similarly, Iraj Abedian, CEO of Pan African Advisory Services, recommends that Government, Labour and Business need to work together to resolve the issues. This would mean wearing different hats. Labour would need to focus on productivity, while business would need to be more socially active. Government’s role would be to balance and protect national interests. Timing is everything Coleman said that his proposals regarding a government led initiative to work with business and trade unions had been positively received by government officials but that it might be a difficult challenge two years ahead of the leadership succession. This begs the questions. When would it be the appropriate time for government to address this urgent issue?...