Business & Finance Flashcards
What is financial management?
The accurate recording of past events and from this developing a framework of knowledge with which to predict the future.
What should setting an annual budget include? 4 items
- known costs
- fees already secured
- how much work can I win
- how many people do I need
Name 4 basic practice costs
- staff salaries & expenses
- property rent
- IT
- training
What is the benefit of monthly reporting?
Ensures constant watch on financial health of the practice
What are the key factors of monthly reporting? 3 items
- are projects & business making a profit?
- fee forecasts - what will be invoiced in the next 3 / 6 months
- review of future resourcing
What does monthly reporting enable?
Cash flow prediction
What does turnover consist of?
Value of the work done made up of fees that have been invoiced from fee forecast, plus or minus WIP
What is the positive aspect of Work In Progress WIP?
Contains value of work done but not yet invoiced
What is the negative aspect of WIP?
Is money you have invoiced but not yet complete
How do you calculate WIP?
WIP=(costs to date X total fee) - fees invoiced to date total costs
