Keeping control of your company`s finances is seen by many as the most important function in the survival of a business. But in order to thrive it is not control that is required, but a sound understanding of how to gain a return on spend. In effect a good sound financial matrix. The single greatest waste of money in any company is directly attributable to failed project management.
Financial dynamics is all about the balance between vision and investment, with the objective of making money. This can be described as the business opportunity. Having all of the money in the world and no vision is as limiting as having all of the vision and no way to finance it.
There are two sides in book-keeping: debit and credit. Equally, there are two aspects to business opportunities: investments and vision. So how do you tell what is the right amount of money to invest in a project? Many companies suffer from the view of: “we've gone this far lets keep going”, only to find themselves justifying the spend by raising their expectations. This type of behavior is very common in very small businesses and in government projects where politics get in the way. It is a delicate balancing act to maintain the day-to-day running of the business while fostering a culture where investment is made in improving all aspects of the business. Sometimes there are justifications for spending money on non-essentials that enable the company culture to work harder.