The understanding of finance is the need for every human being. Most people work for basic needs; they don’t have time to think about their finances. But they don’t know that understanding finance is the most important aspect for every human being. When every human being understands finance, I am sure we will think beyond our basic needs.
I am a practicing Chartered Accountant with experience spanning over sixteen years. In these years, I have seen many success stories and failure stories of my clients. When I closely look at the failure stories, I found that many business people claimed that they failed due to market situations, bad government policies, technology obsolescence, and labor problems. But my strong conviction is that most businesses failed due to financial mismanagement.
When I tried to search, why an entrepreneur did not follow financial management rules and not use finance tools, I found that financial management resided in the academic book only. It is a need of time to make financial management simplified so that, anyone can understand and implement it.
I also observed that many entrepreneurs prepared the financial statements only for tax authorities, other government authorities, or banks to obtain finance. Even when an entrepreneur prepares the financial statement for himself, he still does not know how to analyze the financial statements thoroughly and make appropriate conclusions on the same.
I observed that the big problem in our country is financial illiteracy, which has become an obstacle to growth. There are two types of financial illiteracy one is called general financial illiteracy and the other is about Business Financial illiteracy. My primary intention to start article series on the Topic of Business Financial Management is to teach financial management rules to all people who manage the business. The purpose of this article series is that even small businessmen running the grocery shop should understand financial rules.
Many businessmen are doing the business without understanding the cost of capital. They are also not using the financial tools to design the business strategies. The ignorance of financial rules and red flags have a serious impact on the business. It does not only restrict the growth but also carries the big risk of ruining the business.
Finance is part and parcel of the life of every human being. Every human, either a salary earner or an entrepreneur, should understand finance for good financial health.
Surprisingly, the principles of the business are also applicable to every individual. If any person fails on the financial level, he will undoubtedly face challenges in his relationship and even in his health.
Every human, whether a salary earner; a businessman or even a homemaker; should understand finance for good financial health.
This article series will educate you about good financial management. The financial rules, the different tools that help the decision making, and the red flag that alerts you from wrong decisions, are the main focus areas of this article series. Even if you are a layman and have no financial background, you will still understand the financial rules, which will help you to manage your business and finance more effectively.
