2 Key Benefits of Financial Statements: Khorn Chhundara, KOI CEO
Why having a solid financial statement is a crucial part of any business, company, or institution? Khorn Chhundara, the CEO of KOI Thé Cambodia, provided his interpretation of the question during the Financial Modeling 2020, which took place on December 12, 2019, at Himawari Hotel.
He explained that when we have good accounting management, we will always receive solid financial statements. In his own company, he divides the benefits of financial statements and accounting management into two parts: internal and external.
He further explained the internal benefits. A solid financial statement allows us to understand and see the big picture of the company. That is what is our company’s current market position and in what direction are we moving. What are our expenses and profits because often the owner overlooks some expense details in the company.
For instance, Khorn Chhundara, himself, did not think about the expense of toilet paper in the company at first thinking that it is just an insignificant expense. However, when he looks at the financial statement, those toilet paper contribute 2-3% of the company’s total expenses. This indicates that without financial statements, entrepreneurs will not notice these details.
As a boss or a leader, the owner of the business should work on jobs that require them to use their brains to lead the company to success. If the owner needs to spend time working on jobs that require them to work themselves, such as closing financial statements or create a financial statement at the beginning of the month, imagine the benefits of using this time to build on connections outside of the company to increase sales. With that said, for you to do mental work, you need someone else to do the physical work so you have healthy solid financial statements.
As the company expands, more capital is needed. An accurate financial statement is required to get a big loan from the bank. Healthy external financial statements make obtaining the required capitals, finding investors, and running your business easier.
Healthy financial statements are important to business operations and performances. Entrepreneurs should pay close attention to all-expense details because of all expenses, significant or not, matter. It is important to note that small things tend to add up.
By: Moeun Kimyan