GREEN Business Management and Administration

Business Management and Administration

Business management and business administration are two terms that are often used interchangeably, while they serve the same goals of operating a business, there are some key differences to note. Business management has a strategic focus, through business management an entrepreneur can set company goals, review processes, develop strategic plans, and gain an overview of business operations. Business administration involves the essential functions of operating a business, such as accounting and finance processes. In the PDF toolkit here downloadable, key tools for business administration and key considerations of business management are provided

Budgeting

Budgeting in any business is important for projecting future cash flows and making operational decisions. There are also several key expenses and costs that a company includes in its budgetary calculation. A business budget is a financial plan based on a company’s revenue and expenses expected over a period of time and helps to estimate spending, identify available capital and predict revenue. A budget helps leadership understand how the company is performing (Indeed Editorial Team, 2021).

A business can avoid or reduce debt while increasing opportunities for loans and investors with the right budget. A budget is an important tool that allows businesses to perform several actions as (Indeed Editorial Team, 2021):

Manage cash flow: Accurate budgeting allows a business to efficiently manage its cash flow.

The incoming revenue and expenses can influence the business’s overall financial health, thus reviewing and evaluating the budget semi-annually or annually can enable organizations to better plan for growth and profitability.

Allocate resources: As a budget provides a data-based outline of revenues and expenses, a business can better determine where to allocate operational funds and resources. For example, a business might determine through budget analysis that its digital marketing strategies are more effective than its mail marketing tactics to entice new customers.

Measure performance and meet objectives: Budgets allow businesses to compare past and present operational processes to analyse their performance. When businesses follow a budget to make decisions, in addition to developing plans and implementing growth strategies, it is easier for processes to remain aligned to meet revenue and profit goals.

Improve decision-making: Accurate budgeting helps executives make sound decisions that concern the operation and financial stability of their companies. With these financial comparisons, executives can make more informed financial decisions. For example, a business might analyse its budget to ensure investment decisions provide a return and how to allocate funding and resources in the future.

Identify and mitigate risk: With a comparison of previous expenses and current expense allocations, businesses can identify potential problems and create solutions before issues arise. A budget can enable staff to be aligned to the management goals.

Create future plans: Companies and businesses use data from budgets to help implement strategies to create strategic plans for future growth and development. A budget can help businesses to create revenue and cost projections to make important financial decisions.

Accounting

Effective business administration is crucial to ensuring that a business is successful, and accounting is an integral means of enabling financially sustainable practices. Along with bookkeeping, accounting is a key element of daily operations. A distinction between bookkeeping and accounting needs to be made; accounting is a subjective practice that provides important insights into a business’s financial situation based on bookkeeping information.

In contrast, bookkeeping is transactional and administrative in nature and concerned with recording financial transactions.In essence, accounting comprises summarising, analyzing, and reporting financial transactions to keep the books accurate at all times while simultaneously complying with the country-specific standard accounting regulations and tax rules. Bookkeeping software focuses mainly on documenting finances, data entry, and storage of transactions. Bookkeeping systems provide basic management of finances.

However, accounting software provides all the basic financial management features of bookkeeping, as well as more analytical elements such as analysis tools, financial reports and overviews, and auditing systems. In the PDF toolkit here downloadable, an overview of the benefits of accounting software, as well as options for both free and paid  accounting software will be presented.

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GREEN Business Management and Administration

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