Financial Literacy Checklist

Post Date: May 21, 2015 Categories: Author: innovations
  1. Always find opportunities of using other people’s money to supplement your own:
    • Secure supplier’s credit and pre-payments before delivery
    • Collect your debts as quickly as possible.
    • Whenever you go to the Bank for banking or borrowing solutions, negotiate for the best possible deals.
    • Apply for grants and tax allowances to boost your business.
  1. Develop and use clear rules and guidelines for handling financial matters:
    • Avoid spending money at source – bank all cash and cheques intact.
    • Have operational petty cash, and account for it before renewing.
    • Employ family, relatives and friends when they have skills to offer in return.
    • Monitor stocks to avoid losses due to expiry, thefts and other avoidable expenses.
  1. Do whatever it takes to fulfill the financial commitments you make:
    • Pay your creditors, your bank loans and taxes as regularly as agreed.
    • Use other peoples’ time fully by delegating roles for purchasing, daily banking, selling etc so you can concentrate on developing markets, improving products & services and overall planning.
    • Get used to the game: some people will always discourage you!
    • Learn from early failures and take from the past only what you need for the future.
  1. Save part of the profits and invest it into the growth of your business:
    • Write down all funds drawn by the Director(s) from the business and state the time when the Director(s) will make refunds.
    • Audit your business operations at least once a year.
    • Instead of fearing to take risks, evaluate and take necessary measures to reduce them.
    • The high-jump rule: get hold of unusual windfalls and use them to climb the ladder.
  1. Have a clear financial targets divided into short-term measurable targets:
    • There is always room at the top: think big, set big hairy goals.
    • Give sales targets to your teams and reward them for performance.
    • Keep focused on your goal – do not divert money.
    • Believe that you can get there.
  1. Keep track of the facts from records and use them in making business decisions:
    • Use a standard classification of expenditure items and income sources to record all financial transactions in the cashbook.
    • Keep up-to-date, reliable business records on staff salaries, sales, purchases etc.
    • Analyze your bank statements at least once a month.
    • Check your balance sheet: are you growing?
  1. Build and maintain strong relationships with networks of financial advisors and partners:
    • Increase your bargaining power by building partnerships to offer packages of products and services.
    • Work with big companies – they will finance your business and guarantee orders
    • Look out for free financial advice – it is out there!
    • Get management systems from the big companies for free!
  1. Make financial plans, review and update them regularly:
    • Always forecast your profits and cash flows.
    • Invest in opportunities with higher expected return regardless of public opinion.
    • When applying for a loan, be realistic – do not ‘doctor’ the application for the sake of getting a loan.
    • Markets are changing very fast; sell better products/services at a lower price.
  1. Treat your business as a separate entity when dealing with customers, suppliers, banks, staff, tax authorities etc:
    • Keep separate bank accounts for the business and for your personal use.
    • Specify a salary and benefits for the Director(s) to be paid every month.
    • Use your salary and benefits to pay personal, family or social expenses.
    • When making donations with business funds, make sure the event promotes the enterprise and not just yourself as owner.
  1. Learn from role models who have built a successful track record in financial discipline:
    • Get used to handling big money.
    • Benchmark yourself with the very best.
    • The rich also have ethics.
    • Read and learn everyday.

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