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Making sense of all the numbers

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When organisations publish critically required year-end financial and company reports, particularly for listed companies, the main go-to person is the Accountant and/or the Finance person; as ultimately it all boils down to the numbers.

If a company collapses one of the first questions is, ‘Where was the Accountant?’ The choice to downsize or restructure is placed on the Accountant’s shoulders. International and local reports and surveys allude to terms such as ‘Business Confidence’ they are, in gist, talking about the environment these custodians of business entities are responsible for.

In March this year the Business Expectations Survey (Bank of Botswana) concluded that, “Business confidence deteriorated from 52% in September 2014 to 44% in March 2015.

While the survey shows increased optimism in periods ahead, this could be fragile, with continued uncertainty regarding the strength of the global recovery, modest domestic economic growth and increasing challenges in the supply of key inputs (water and electricity) posing threats to business confidence.”

Despite the external but immediate challenges and threats to business confidence such as the regular supply of water and electricity and global recessions the above survey statement usually affects directly the accounts and finance offices who are tasked with turning the bottom lines from red into black. Since the economic downturn observers believe that accountants have had to adapt and transform and not only focus on meeting reporting deadlines or attaining clean audits.

Michael Kampani, Managing Director of G4S, who is also an accountant by profession explains that, “As Accountants at the heart of organisations we have a duty to drive business recoveries or turnarounds during this period of economic downturn and pessimism. The current economic downturn calls for more from Accountants as key members of the business leadership,” he adds.        

Speaking at the CIMA Botswana dinner dance recently, Kampani who has previously served for five years as Finance Director for G4S explains that an Accountant on company level is the, ‘financial advisor to the company’. “Accountants should be able to move the company forward, to steer the direction of the company by advising on the consequences of taking any route. Everything translates into money,” adds Kampani.

“There is pressure on revenue growth, pressure on margins, and ultimately pressure on profitability. If you cannot force the top line to grow, where else do you have to look?” Kampani’s observation is that effective management for accountants mean being forward looking and entails looking beyond retrenchments.

Although he emphasises that revenue growth is the heartbeat of any commercial entity he encourages an eye to be kept on other areas of business to increase profitability. One of the aspects he identifies as needing to be considered is; risk management and governance.

“In these times of economic downturn, when business is hard to come by, the last thing you want is to be faced with a huge financial or reputation risk,” he advises. Another area an accountant needs to show character in is ‘guarding against extreme short termism’. “Yes you can cut costs, you can freeze investments but that should be well measured, or else we risk adversely impacting sustainability.”

He observes that in regards to other accounting related functions such as procurement and sourcing the question should be, “How much are we saving with each procurement decision? Are we getting the best deal,” adds Kampani.

The CIMA Botswana Country Manager, Letus Chinyepi states that CIMA has geared itself to prepare the accountant to adapt to this changing work environment. The qualification now offers additional to its standard accounting courses subjects such as, ‘Risk Management and Internal control’, ‘Business planning’, ‘Change and Process Management,’ and ‘market environment’.

“The mentioned Competency Framework forms the base of the new 2015 syllabus that came about as survey results from major companies worldwide on a complete Finance Practitioner of choice who can turn-around the fortunes of an ailing company,” adds Chinyepi.

Above all the training and education levels, one essential component of a Finance Practitioner is integrity, a high level of integrity. When people handle money they are faced with the temptation to mismanage it.

“The best bet is that accountants affiliate with professional bodies such as BICA, ACCA and CIMA. These bodies have strict codes of ethics and their members need to abide by their rules. Should a member be accused of misconduct they will face sanctions. The bodies ensure your professionalism and integrity,” concludes Kampani.

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Matambo calls on financial sector to pick GDP

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Finance Minister, kenneth Matambo

Finance Minister Kenneth Matambo has announced that government is committed to support financial service sector to prop up the country’s Gross Domestic Product (GDP).

Currently contributing over 13 percent to GDP, Matambo said the sector has potential to increase its share. “Hence government’s interest in the sector,” said Matambo addressing delegates at the inaugural Botswana Insurance Holdings Limited (BIHL), Global Financial Summit.

The country has built a strong, resilient and fast growing financial sector underpinned by a robust regulatory framework. The finance minister who is expected to step down next year, noted that government’s commitment to the financial service sector has this year been buttressed by a number of laws passed in July relating to money laundering activities.

In addition, Matambo said the continued investment in the development of information, communication and technologies (ICTs) backbone infrastructure is also to support local banks’ rising appetite for online services.

The Minister said the country remains committed to maintaining micro-economic stability to spur private sector participation in the economy. “Our vision is to become a high income country by 2036,” said Matambo, challenging the private sector to step forward and help government to develop the country, bemoaning the low levels of financial inclusion and shallow domestic capital markets.

He said the private sector should come up with more initiatives to develop further the local capital markets. The Minister’s sentiments were also shared by Martin Davies, Managing Director for Emerging Markets and Africa at Deloitte who has challenged the country to start dealing with its low manufacturing value add.

“How do we start to diversify beyond the single commodity economy,” quizzed Davies, adding that manufacturing increase is vital for low inequality across the country.

“Inequality results in bad public policy, as the state starts to believe and think they have to intervene more,” said Davies, highlighting that the country needs to move away from the absolute concept of state drive growth. Meanwhile, minister Matambo has applauded the private sector for leading economic dialogue in the country through events such as the BIHL Global Finance Summit.

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First Lady advises women entrepreneurs

Keikantse Lesemela

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First lady, Neo Masisi

First Lady, Neo Masisi has urged women entrepreneurs to bring change in the economic development of the country and the rest of Africa.

Speaking during the Lioness Lean in Africa breakfast on Friday, Masisi said women entrepreneurs are remarkable engines of economic growth and job creation. “I believe women entrepreneurs hold incredible potential and credentials on the continent because Africa has the highest percentage of women entrepreneurs in the world.

It is projected that millions of much needed jobs will be created over the next decade and these will be created predominantly through small businesses which are mostly run by women,” said Masisi.She highlighted that women entrepreneurs are also the most powerful engine for equitably distributing growth and they are also solutions for addressing inequality on the continent.

“It is a proven fact that for many generations, women understand the simple concept of barter and commerce. These are the role models of our past and our present and they will continue to inspire new generations to do more for business to grow,” she said.

The Lioness Lean In Breakfast Series brings together inspirational and successful women entrepreneurs to share, inspire and connect with the next generation of great women-led start-ups.

The platform is based on a breakfast networking and speaker presentation format, which has been organized in locations across the African continent for the past year by Lionesses of Africa, empowering over one million women entrepreneurs across the continent.

Stanbic Bank Botswana Head of Personal Markets, Omphemetse Dube said they are pleased to bring the Lionesses of Africa Lean In platform to Botswana once again to bring together women entrepreneurs in the country and help to nurture their growth further.

“Botswana is blessed with a number of thriving female entrepreneurs, and the potential for the next generation of talent is strong. Platforms such as this are therefore paramount in growing the cause and we as a bank are proud to help champion that movement further,” said Dube.

Founder and CEO of Lionesses of Africa,Melanie Hawken noted that Gaborone is a growing and exciting centre for women’s entrepreneurship in Africa. “This is a must-attend event for women entrepreneurs in the country as it gives them the opportunity to hear the inspiring entrepreneurial stories of women who are building great businesses here,” she said.

The annual Lionesses of Africa event allows entrepreneurs to benefit from the insights and advice of women entrepreneurs who have seen and experienced it all and to also provide an excellent opportunity for networking.

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