The Foundation of Any Successful Company is Organizational and Financial Management!

Good Business Administration supports marketing and business development.

THE IMPORTANCE OF ORGANIZATIONAL MANAGEMENT

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Organizational Structure

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Communication

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Management

THREE PILLARS OF FINANCIAL MANAGEMENT

Profit and Loss

The Profit and Loss statement gives you an insight into where your expenses are and where your revenue is. A profit and loss statement is measured monthly to show your profit or loss at the end of the month.

Balance Sheet

Your Balance Sheet or list of your Assets (the things you own) and your Liabilities (the things or money you owe someone else) gives you an insight at a certain point in time (a snapshot) of where you stand in Net Wealth.

Cash-Flow

It is important to understand that whatever your Profit and Loss statement says, or your balance sheet, even if it all looks very positive and promising, Cash-Flow is key to success.

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Every next month you can look at the financial situation and profit or loss for that new month and also at your cumulative financial situation. In other words you in March you can look at March only, March Year to date (YTD) and Quarter 1 (if your year is in line with a calendar year). Looking at March can also be referred to as March Year to date (YTD). More about the workings and use of various Profit and Loss Accounts later.

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Without going into the difference between long-term and short term assets and liabilities, as long as the value of your assets are higher than your liabilities you are in a better position than if your liabilities (or debt) is higher than what you own, i.e. your assets. To make sure that you build wealth for the future it is important, whether at home or as a company to keep track of your revenue streams and expenses. We’ll discuss more details of how to look at a balance sheet a little later.

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If your profit and loss statement looked good for the last few months, but you have debt to pay off, or bills to pay, but not enough cash or assets to sell quickly to generate cash, you have a problem. Planning ahead, understanding what assets and ready cash you have, and what bills or debt (like mortgage) payments you will face short term is key to stay financially afloat, particularly if you live paycheck to paycheck, or in any company that is heavily investing to generate growth.

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