07 Jul 2013

The business environment is becoming increasingly more complex which sends a warning to business owners to make sound financial decisions based on accurate records that are well documented.

This observation was made by Citizen Entrepreneurial Development Agency (CEDA) business advisory manager, Mr Petrus Sebina at a three-day Pastel Accounting training workshop for Small and Medium Micro Enterprises (SMME’s) held in Francistown last week.

Mr Sebina noted that today’s economic environment was particularly complex with its rapidly changing markets, new and successful players entering the space together with economics that previously seemed healthy falter and fail.

He said this was a warning for businesses to scrutinise how they have been running their finances and develop better ways of managing their records.

“Accurate records will be the most important weapons in the business owner’s management toolkit,” said Mr Sebina.

He also noted that increasing competition meant that it was important to react promptly to on-going changes in the business environment and advised that business owners should be certain about their reactions.  

Mr Sebina highlighted that many business owners invest a great deal of time and effort into the running of their businesses and yet fail to realise the importance of maintaining good documents and records.

He said the majority of SMME’s do not know their net profits because of the lack of a good and adequate record system.

He stressed that it was critical for managers and owners of businesses to be able to read and understand numbers very well.

Poor quality data or inability to understand data will always severely affect the performance of businesses, he said.

“The preferred record keeping system should be accurate, reliable and easy to follow while at the same time consistent as to the basis used,” he said. 

Mr Sebina also emphasised that good and accurate records would keep the owners on their toes while also helping them to monitor every situation taking place in the business.

The objectives of the workshop were to assist SMME’s in preparing their financial statements quickly and accurately as well as to contribute promptly to assessing their financial situations at any given time.

CEDA also aims to enable the owners to measure their business performance against projections that were originally set down in the business plan and provide them with information which will enable them to control their cash flows.  Ends