School of Professional Skills – Finance

Although most of this blog will be about my Professional Practice unit I have also decided to include my professional skills work which in just one session has taught me a great deal more about the business world than my university life so far. The first session was about basic financial understanding and was led by a business entrepreneur accountant. Here are my notes from the session that i have elaborated upon.

A better understanding of finance = a better position in any company. If you understand how finance flows through a business then you are in a much better position than if you don’t although as long as you know the companies input into the bank is bigger than its output then its on the right track. If you want to know whats is happening in the company you work for the first person to get chatting with is the accountant, they know!

Understanding Finance – Cash in must be grater than cash out. Westernised nations can’t keep spending more cash than they are getting in. Most businesses that fail do so because they run out of cash.

businesses keep an eye on money by keeping ‘accounts’ including

‘Profit and Loss Account’ – Frequency depends on the size of the business

‘Balance Sheet’ – Assets and liabilities, Owns and Owes usually once per month

‘Cashflow Statement’ – Where money came from and where it went, control of ‘Working Capital’

‘Statutory Accounts’ – Annual set of accounts – Shareholders, Creditors, Providers of Finance eg Banks. Filed at companies house as public record

‘Management Accounts’ – More detail will get exposed to management accounts will also contain more information like volume of stock

Most businesses do not want to borrow money at the moment and it is not just the banks that are the problem but also the businesses. The banks aren’t lending to risky Businesses

There are key performance indicators that businesses look for:

Sales per employee, % prime margin, employee costs as % of sales, bought in services as % of sales, Days of sales owed by customers, inventory as % of sales.

Recommended Research –

Start with ‘Why’ -http://www.startwithwhy.com/

Ted Talks – Simon Sinek

What are employers looking for?

To get an interview you need – Vocational and Technical skills PLUS Relevant Experience (if possible) AND a Rounded Education. All this needs to be made clear by your CV. In an interview employers also look for an understanding of life, society does not owe you a living (Personally I think this is a key message for other students, do not expect to come out of uni with a 2:2 in bum scratching and go straight into a managerial position… IT DOESN’T WORK LIKE THAT!) also a rounded knowledge helps. Read the news (BBC News homepage works for me, being of ‘Generation Web’ I find it easier than reading a newspaper plus it tends to provide a much fairer and balanced view of events than many newspapers).  Have a can do attitude and don’t over egg. When asked about Facebook and what employers would think if their potential employers didn’t have Facebook the lecturer said if a person didn’t have facebook it meant they were a sensible person using himself as an example and stating that he didn’t have facebook.

If a company is looking for leaders the will look for people that can – Enlist willing cooperation and get desired results. If a company is looking for employees it will look for people who can hit the ground running and will be useful from day one. Employees need to understand the ‘What’ and the ‘How of the position they are employing for but the employees who become leaders also understand ‘Why’. Just knowing the ‘What’ of the position is all a low level employee needs to know. To move up the corporate ladder a person needs to know the ‘How’ so they can tell others ‘What’ to do and to become one of the top people in a company or create a company they need to understand the ‘Why’ and ask ‘Why’ are they doing it.