Financial Management – A Case Study in Financial (Mis-)Management

A macro issue

Recently we witnessed the victory of the university student body over the Government regarding the issue of university fees. Regardless of where your loyalties or opinions lie, the outcome raises the burning question, “How are we to finance university costs in the future?” There is no doubt that the costs of running universities are outpacing the inflation rate, but if we are to protect the standard of tertiary education in this country, the costs have to be met. Otherwise we will end up with yet another casualty of the modern South African economic environment.
It has been said that university education has been under-funded for twenty years, which makes one wonder, “What is the university equivalent of load-shedding?” One shudders to think how this will impact the future of our country’s intellectual capital.
I have read many ideas put forward by learned individuals to address the funding issue. These include raiding the national skills fund, linking university funding to BEE scorecards, or basing the repayment of student loans on after-graduation earnings and deducting the repayments at the source.

How does this relate to Financial Management?

Financial Management is as critical in hard times as it is in lucrative times, conceivably even more so. Competent Financial Management would have avoided the long term under-funding debacle. Now it is up to expert Financial Management to address the funding questions, answer them, and effectively implement them.
Financial Management is not a backward view, as some may think. It is rather a forward view, with the occasional glance in the rear-view mirror. Many companies face funding or profitability crises during their life cycle. Adequate planning and execution, timeous reaction to events, and on-going financial discipline will minimise the negative impact of these events and provide for a long-term solution.

Affordability

Many say that they cannot afford a Financial Manager. I say that they cannot afford not to have one.  To this note businesses and other entities are seemingly unaware that a Financial Manager does not have to be a full time employee.

At Leaders Business Solutions we offer an Outsourced Financial Management service that can be tailored to your needs and resources, and can be constantly adapted to ensure that it remains dynamic as your business grows.

Contact me at simon@leagroup.co.za to arrange a complimentary confidential discussion regarding your Financial Management needs.

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