Brexson Advisory

18/09/2021

Our business cash flow is liked the life blood of our body.

Just as a person cannot live without blood, a business will not be able to survive for too long if running out of cash flow.

However, it appeared that most small businesses are focusing on their profitability at the expense of cash flow condition. Most of them will monitor how much sales and profit they make every month but do not put high priority on the cash inflow and outflow need of the business. It is only when the business is under locked down without sales being generated that the impact of low cash flow started to materalise and hit them hard.

So it is time for businesses to start to work out a proper cash flow plan that can last at least 6 months or more.

I am going to share few key causes of business poor cash flow in my next sharing and how to fix them.

Stay tune for next.

30/05/2021

Hi, I am going to start writing about all the stuff I have learnt to help SME business owners & managers without finance background to understand, analyse and plan financial result of your business. Want me to add you to the list so you can get it ? Please pm me if you are interested.

18/05/2020

Business appraisal is a technique to identify potential business projects that can improve the company future cash inflows.
Many models are available to help business managers to make decisions on which projects to invest in.
There are models that take into consideration time value of money e.g. present value and internal rate of return and some are not e.g. payback period and accounting rate of returns.
So, what is time value of money ?
The time value of money is an idea that a dollar today is worth more than a dollar tomorrow due to inflation or its buying capacity.

The value of a dollar changes dramatically depending upon when you get it and what you do with it.

Say you have $100 today and I offer RM100 one year from now in exchange for your RM100 now, would you accept ?

Why not ? Because you know RM100 now should worth more than RM100 one year from now due to additional interest income you can earn if you invest in FD.

15/05/2020

In accounting term, working capital is defined as current assets less current liability. It measures the ability for the company to repay its short term obligations e.g. amount due to suppliers, salary payable, income tax instalment etc.

In layman term, working capital is about liquidity. The more liquid the asset, the easier it is able to be converted to cash. Based on this, cash at hand and cash at bank is the most liquid among the current assets.

Current assets also comprised of trade receivable or debtors and inventory. The ability of the company to convert these two current assets into cash will reflect the strength of the management to handle working capital management.

Without effective working capital management, the company will most likely face cash flow constraint issue and not be able to maintain the business operation for too long.

Do you know how to manage working capital effectively ?

14/05/2020

Most company have a mission. They may also have a vision and set of values.

What is the difference between Mission and Vision ?
The mission defines the reason the company exists and is unlikely to change over time.
Great mission statements connect with the needs and objectives of customers, instead on their products and services.
The vision sets out where the company wants to go. It is normally more specific than a mission.
While a mission hardly changes over time, a vision will evolve around customer needs.
Visions change over time while missions are constant.

Why do we care?
We care because company with a clear mission and vision are far more likely to be successful.

How do we write a great mission statement?
Developing a great mission statement is straightforward as long as you remain focused on your customer and their needs.
· Start with your target customer
· Keep it short and simple
· Be inspirational and get emotional

13/05/2020

CASH is king, more so now when we are facing with a lot of uncertainty during this unpredictable moment when many businesses are left without sales during the MCO period.

In fact, running out of cash is the no 1 reason for small businesses failures. Are you managing your cash flow effectively ?

In order to maintain a healthy cash flow, first is to identify at your current bank balance availability and start to plan for cash flow projection. Plan your cash inflows and cash outflows for the next 6 months, target to have sufficient funding to cover for operating expenses.

You may want to explore for additional loan and debt facility as a temporary measure to maintain liquidity that is needed.
Alternatively, you should explore for other sources of financing such as family members, friends, angel investors, crowdfunding etc.

12/05/2020

What is working capital ?

Imagine you are managing your personal finances.

Each day you go to work and ‘sell’ your time to your employer.
In return they pay you cash for your work at end of each month.

You then use that cash to pay your bills and settle your commitments for that month.

The cycle repeat following month. You get paid, you pay your bills. And so on.

But imagine you had to work for 3 months straight before you got paid. So the work you did in first month say Jan, you didn’t get paid until April.

But your bills still need to be paid in January, February and March

So what are you going to do now?

You will need to reserve some cash to pay the bills in January, February and March before you get paid in April.

That is what we called working capital in a business.

29/12/2016

17/12/2016

Want to keep yourself updated with latest GST development and prepared for GST audit ? Sign up for our upcoming workshop in Jan 2017.

18/11/2016

Power BI is an advanced BI tools that can manage your business information effectively and efficiently.

16/11/2016

LHDN: Beware of Fake Tax Refund Email

The Inland Revenue Board of Malaysia (IRBM) has released the warning to taxpayers again on 11 November 2016 and denied issuing [email protected] email which requires taxpayers to fill out certain information as procedures for obtaining income tax refunds.

Please note that income tax refund is processed based on the taxpayer’s information stored in IRBM database, taxpayers are not required to provide any information via email.

The fake refund email also request taxpayers to key-in their banking details which linked to a fake banking website.

Taxpayers is therefore advised to take extra caution as this refund scam is still prevalent on the internet.