Management information is crucial in the effective and efficient management of resources and of any business. No goals and objectives can be achieved without it. No problems can be resolved without it. No effective decisions can be made without it.
During the Covid-19 lockdown period a large number of small, micro and mid-sized businesses (SMME’s) experienced significant cash flow problems because they could not trade at all or traded partially. Some SMME’s closed down permanently. Others granted their staff unpaid leave of absence, retrenched staff, cut salaries and benefits and others closed their doors temporarily in order to stay afloat. Most of these businesses continued to battle to stay afloat.
The SA Government, the SA Revenue Services, commercial banks and some financial institutions, financial service providers and other relief funds offered financial assistance and tax breaks and incentives to the affected businesses.
CONDITIONS FOR FINANCIAL ASSISTANCE
However, these financial assistance and tax breaks and incentives came with conditions.
Businesses had to provide proof that their cash flow challengers exist as a direct result of the lockdown i.e. businesses that could prove viability prior to the arrival of the pandemic. In addition, the tax affairs of businesses had to be in order and be tax-and regulatory compliant.
In order to qualify, SMME’s had to produce up-to-date financial statements and management accounts including financial forecasts, business plans and specified reports and information .
A substantial number of SMME’s could not provide these reports and information. Some were also not even tax-and regulatory compliant. Consequently, the majority of SMME’s could not take up these financial assistance, tax breaks and incentives. Other SMME’s applications were rejected because of, inter alia, poor, incomplete and unreliable reports and financial mismanagement.
The SA Government also provided a R200bn loan guarantee scheme to assist eligible businesses during the Covid-19 pandemic. The loan guarantee scheme were administered by the commercial banks. However, there was a very low uptake, approximately R16.08bn during 2 October 2020, of this loan scheme because of the above reasons, amongst others.
RELIABLE AND RELEVANT MANAGEMENT INFORMATION
Running a business successfully requires credible data and reliable and relevant management information in order to make effective decisions and implement appropriate, economic and commercially-driven action plans. Moreover, providing effective and meaningful business, operational and financial advice also requires reliable data and relevant management information.
A lot of businesses go in distress and fail because of wrong and ineffective decisions and actions. The distress and failures could have been avoided if timeous, complete, meaningful and reliable information and data were being produced by such businesses. Such information include performance reports, risk information, market and competitor information, sales and customer reports, financial and managements accounts, operational information, HR reports, financial planning and analyses reports, status and progress reports of strategies implemented, business outlook information, integrated reports etc.
In order to raise capital and loans, apply for grants and credit and other financial assistance, credible, appropriate and reliable financial and non-financial information is required by lenders, investors, providers of credit and grants.
Ultimately, those SMME’s that were in distress and experienced cash flow problems could have received financial relief, tax breaks and incentives had they produced reliable and relevant management information.
COMPETENT STAFF
The compilation and preparation of reliable and meaningful information must be done by highly skilled and competent staff. When such staff is not available in the business, then the production of such information and data must be outsourced to a reputable financial and business service provider.
ABOUT OUR COMPANY
Our company, Bethanie Management Consulting CC, has the expertise, experience and capabilities to create value for SME’s and large businesses. We also compile and prepare reliable management information that assist businesses and SMME’s to make effective and efficient decisions and develop and implement appropriate action plans.
For more information on how we can help you to up your game, please visit our blog at www.bethanieconsulting.co.za/blog
You may download our business profile by clicking here.
Contact us
Please call us at 011 042 9768 or 072 296 1281 (Virgil). Or chat to us on WhatsApp. You can also email us at virgil@bethanieconsulting.co.za. Or you may contact us by completing our online form for a call back.
SME’s have a very high failure. Less than 20% of SME’s survive beyond 5 years. These SME’s can improve their chances for survival by designing, implementing compiling relevant and fact-based information to support management in their planning and control of the business.