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Gillian is at the end of her wits! They only have less than three months to finish the project and yet all things seem to be going wrong. And to top it all, there’s little financial resources left to finish all things that needed completion before d-day!

To an expert’s eye, Gillian’s problem all boils down to improper project management. She may have started the project without evaluating all her resources and whether or not these resources will be enough to meet all the requirements of the project. She has also failed to make a doable timetable for the project, the reason why she is on a panic stage.

Project management is the process of applying one’s know-how or knowledge in overseeing and managing a project of whatever magnitude. Do not think that project management is required only by big projects. Small projects can also benefit from an effective project management. Knowing how to use and apply the knowledge you have acquired in all areas will be helpful in the implementation and accomplishment of any project.

Scope of project management

Project management covers all the areas necessary to see a project into completion such a finances, administrative work, communication and public relations. Project management includes but is not limited to:

1. The development of a project plan- The project manager must talk to the project creator before accepting or starting a project. They must agree on specific terms of the project so as to avoid conflicts and unreasonable delay in the future. Make sure you know what needs to be done and in what time frame. Ask for specific results that the creator wants to arrive at so you would know what to expect and you will have a gauge as to whether or not the project was managed properly.

2. Definition of the scope of the plan- Once the terms of reference has been agreed upon, the project manager must make a project plan which contains all the things necessary to start and complete the project. List down all the resources and logistics you need and the available human resources. Make a map of the project, from start to finish. Make the map realistic so you can avoid problems later on.

3. Creation of a project schedule-A timeframe for your project would help you map out the exact schedule required to start and end the project. Create specific time schedules for each step of the project so that would know if you are ahead of your schedule or whether you need to hasten things up to meet the desired schedule.

4. Acquisition of human resources- Aside form good planning. A good project management relies on the acquisition of efficient and able human resources. The project leader may be doing all things possible but if he is surrounded by an inept staff, then he will have more problems than he can handle. A project’s human resources must be informed of the project schedule and deadline so they will know what is expected of them. Try to motivate your staff and praise each accomplishment no matter how small.

5. Development of a communication plan and good public relations- Project management includes the creation of a good communication plan which will enable the efficient flow of information from the leaders to the staff and to the stakeholders. The communication plan must make sure that all information related and affecting the project are relayed to the proper person or office as soon as possible to avoid delays and misunderstanding.

A good public relations plan should also be put into place, particularly if the project has a positive or negative impact to the community. So many projects have been stopped in the middle due to pressure from the public. It is better to inform the public on the advantages and disadvantages of the project at the start of the plan so as to avoid conflicts later on.

Proper project management is not really complicated but it requires had work and proper planning to make everything smooth, from the start to the completion of the project.

Make or Break

Managing working capital is a critical component of financial management. It can make or break a company.

Inadequate working capital can put a company in jeopardy rather quickly due to liquidity problems. On the other hand, excessive working capital strains the companys finances.

Accounting Definition

Accounting defines working capital as Current Assets less Current Liabilities. It is also known as Net Current Assets. Current assets are those which are considered liquid and are convertible or expected to be realizable in cash within a period of 12 months from the date of the financial report. Common examples include cash, inventories, accounts receivables, prepayments and marketable securities. Current liabilities are those which are expected to be repaid within a period of 12 months. Examples include bank overdraft, short term borrowings, accounts payables and accrued expenses.

Operating Standpoint

Operationally, working capital indicates the ability of the company to finance its current operations and to meet obligations when they mature. It measures the companys ability to pay daily bills from a liquidity

standpoint.

When it is Inadequate

If there were more current liabilities than current assets, the result is called Net Current Liabilities, Working Capital Deficit or simply Negative Working Capital.

If all the liabilities were to become due and payable immediately, the company does not have sufficient liquid resources to pay them. This could potentially lead to a going concern problem, which means that the company may not have the ability to continue in operations if it could not successfully find sufficient liquid resources to settle its obligations quickly.

From a financial ratio perspective, a companys working capital position is also represented by its current ratio. Current ratio is calculated using current assets to divide by current liabilities. A current ratio of

less than one means that working capital is negative. For example, if current assets were 0 and current liabilities were 0, the working capital deficit calculated would be (). The current ratio is computed as 100/120, giving 0.83, which is less than one.

Remedial Strategies:

To relieve working capital deficit, the following strategies are commonly adopted:

a. Raise Equity

A company can issue more shares to existing or new investors to bring in fresh funds. This infusion of equity will help to raise cash. The side effect of this may be to dilute the interest of existing shareholders who do not wish to inject further equity into the company.

b. Selling Non-current Assets

Non-current assets are those which are not expected to be convertible into cash within a period of 12 months from the financial report date. These are typically fixed assets such as property, plant and equipment. Included

here are also long term investments in other companies. A company can sell its non-core assets to raise cash to enhance its working capital position.

The other way of liquefying its balance sheet may be to enter into a sales and leaseback transaction of its property. This would result in cash infusion into the company.

Ceasing further capital expenditure would be wise till the cash situation and working capital position improve.

When Having Too Much is Bad

On the other hand, having too much working capital may not be ideal either. This is particularly so if the expansion of working capital is due to the rise in inventories and trade debtors, especially when they are

rising faster than sales revenue.

Inventories

Excess inventories pose several problems for businesses. The first is that of obsolescence risk. It could mean physical deterioration as well as technical or market obsolescence.

The second problem is that inventories drain cash. Liquid cash is tied up until the products are sold and the money collected from customers.

The third problem is that inventories require storage facilities. This takes up valuable space and may cost a business in terms of rental expense or opportunity cost in terms of facilities tied up.

If a business has old inventories, it would be advisable to clear them out quickly and free up the cash so that it can be redeployed for better uses.

Trade Debtors

Trade debtors represent financing by the company to its customers. Most often, this is interest and collateral free. On the other hand, the company may need to obtain bank financing on which it incurs interest.

When trade debtors build up, it may also be an indication of lax credit policy and poor follow up on outstanding debts. It may be worthwhile to engage additional resources to recover these receivables more quickly than letting customers take their time to settle their invoices way beyond the credit limit given.

It Boils Down to Efficiency

The more efficient a business can manage its inventories and trade debtors, the better it is for liquidity. More cash would then be available for growing the business, reducing finance costs and paying shareholders

dividends.

Conclusion

As we can see, it takes prudent financial policies, management discipline and vigilant monitoring to ensure that a fine balance is maintained for working capital. But the effort will pay off handsomely for the business

with the will to do so.

Project Management is the field dealing with the study of the processes involved in the managing of projects, whether they are complex and of high value or simplistic and of a small budget. A project is an endeavor by a group of people working towards completing the project in the scheduled time and cost with the prescribed quality.

Today, we have many complex tools for managing our humongous projects With the sophistication in these tools, contract documents for projects are getting more stringent and punitive. With the increase in value of projects, their complexity increases and the requirements for sophisticated tools to manage them increase. With an increase in the value of projects, the inherent risks in the project also increase. The more complex the projects get, the more the people required for managing them, and the more sophisticated the tools being used therein. An increase in underlying risk also calls for an increase in financial jurisprudence.

These sophisticated tools serve the following purpose:

Plan arrangement of finance at the prescribed intervals,
Procure materials and equipments at the designated time for the construction,
Arrange for men to work on the project.
Arrange for sales of the project facility.

Tools like MSPROJECTS, PRIMAVERA, etc, help plan the project. Not only do these plans quantify the time and cost required for the projects, but they also provide information regarding the time of requirement of finance during the project duration. We also have SAP and ERP, which facilitate efficient procurement and delivery. Not only do these tools help us implement JIT principles, but they also reduce inventory holding costs, along with a reduction in space requirements for holding work in process and finished goods inventory.

With such sophisticated tools at our disposal, one would think that projects could be managed more efficiently, within the allocated time and cost and in the desired quality. Unfortunately, that is not the case today. I can cite numerous instances where, in spite of the use of sophisticated tools, projects have overshot their budgets and timelines. There are numerous instances where projects have gone over budget and surpassed their deadlines due to various reasons.

At times there is a problem of rehabilitating project affected people, at other times, the title to the land on which the project is being constructed is not clear. At still other times, there is a shortage of labor to work on these projects. There are instances where the client does not pay the contractor on time, resulting in a delay in the construction process. At times the drawings for the project may be delayed. There can be many more reasons for delay in project timelines.

Contract documents today stipulate heavy fines for delay in project timelines. A project worth 150 crore had a liquidated damages condition in the contract, which stipulated a penalty of 10% of the contract value per day of delay. Still another project had a stringent damages condition at 20% of the contract value per day of delay, for any delay above 90 days from the scheduled completion. With such stringent penalty clauses, and the still occurring delays, one would wonder how useful the sophisticated tools for project management have been.

The above question will give rise to a deba

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Most of us must have faced the finance crunch at least once in life time. But weeding finance is one of the greatest tensions in India. The customs followed by different communities in India are unique to every state. Some wedding are conducted at the groom�s expense and others by the brides. The expectations, social status and family trends decide the overall expense of the wedding. But now a day�s many families mutually share the expenses as per previous arrangement.

Still today in India the weddings are mostly the parent�s responsibility. They start thinking of their kid�s marriage and start saving and planning for it much in advance. The bride�s family keeping in mind the amount needed for their daughters marriage start saving from the time she is young. Dowry system is another chief cause for this anticipatory saving on the part of the parents of a bride.

The parents have to give their daughter in marriage lots of gold, silver and precious ornaments. They feel that all these gifts from the parental home will give their daughter the due respect and status in a groom�s house. Also they have to give her these gifts considering the customs, traditions and society they belongs too. As in most society they also need to make sure that they have enough finance to spend on wedding according to their status. Managing these expenses smartly can reduce the last minute stress and anxiety.

How one will prepare for finance management of weeding well in advance? Generally making a rough calculation of how much the marriage expense will be is the first step towards a financial planning for the wedding. Try to write down, how much in gold, silver and cash will you need for a normal wedding in future. Then calculate the money needed to buy them in future. This of course doesn�t include other expenses needed for buying bridal clothes and accessories. Now days there are plenty of saving scheme giving good and consistent returns over the long period. You may also consider long term investment in mutual funds and shares.

Few calculations and plan should be done. Think of all the resources you have in hand and then work out the shortage. Think about the possible loans or over drafts you can comfortably get. Make arrangements before hand and don�t wait till the day is fixed. Try to get an advance and keep it ready for the last minute expenses. Start buying gold and silver whenever you have excess money in hand. Invest on it when the prices are low. Instead of buying jewelry consider buying gold coins and biscuits in pure form to get maximum return from it.

Research and keep ready other sources which you can tap just in case of any emergency needs. It is wise to start saving at a much earlier stage. You can get into gold chits and start making a fixed deposit which will be available during the wedding time. Managing wisely the resources in hand and acting smartly is how one can manage the finance during a wedding. Most of all always try to make it simple and plan efficiently.