Financial Training For Non-Financial Managers

Fundamental knowledge of finance is essential for all professionals, even if they do not have a direct role to play in the finance and accounting departments in their organization.

Managers who lack the capacity to make intelligent assessments of financial data will find themselves handicapped and unable to understand the impact of their strategies on the financial bottom-line.

Many managers are promoted through skills in their own field – which may not include much financial skill and exposure.

Having the responsibility of submitting and working to tighter budgets, reducing costs, and coming up with ideas for improving profits may have many non-financial managers feeling out of their comfort zone.

These trainings are normally designed not to turn non-financial managers into financial experts. They are however designed to introduce them to finance and accounts.

Key topics include the role of the finance function, understanding and interpreting the financial statements, and preparing and managing budgets.

The need for all of your managers to understand finance stems from the core business goal: This is to generate profit.

If your general management does not understand the processes and strategies involved in managing finances, then your company is reducing its chance of business survival and success.

Here are the core areas of finance that all of your managers should be aware of:

• How the business generates profit (the income statement drivers)
• How capital is invested (the balance sheet drivers)
• How cash is generated and consumed in a business (why profit is different from cash)
• How the business increases cash flow generation
• Commercial KPIs and how they are used to drive performance (what measures of return are typically used and what drives this return)
• How the business measures and manages commercial performance
• How clients measure and manage their commercial performance
• How the business’ products deliver a successful commercial outcome for its clients (demonstrating the value to clients of the products and services the business supplies)

All managers have a role to play in driving performance and reducing risk in their day-to-day activities. To this end, providing them with a practical understanding of finance is critical.

Using Business Simulations in Finance Training

Through activities and simulations designed to emulate genuine workplace context and scenarios, employees have the opportunity to develop their understanding and skills through first-hand practice.

Finance training in the form of business simulations helps enable non-finance managers to gain a broader view of the business and appreciate how some decisions can ripple out and affect other areas of the business and, ultimately, the bottom line.

Business simulations also allow for the collection of quantitative and qualitative data, which more traditional training methods simply can’t accommodate, helping learners make more informed decisions and change their behavior to better contribute to the bottom line.

This experiential method of training is highly effective in building practical skills, insights, and confidence while giving managers a safe environment in which to learn and practice new skills.

Simulations inject a level of competitiveness, increasing participants’ desire to achieve the learning objectives. The heightened engagement often stimulates accelerated performance and while generating data that can be used for feedback.

Simulations also give learners an opportunity to internalize new ideas and reflect on their effectiveness areas that need further support. They encourage learners to actually use new skills and capabilities in the workplace following the success of their experiences during the learning process.

Business simulations engage learners at a much deeper level than other learning solutions such as seminars or e-learning.

When they are immersed in an engaging business simulation, they quickly make the link between how their actions actually impact the numbers and, as a result, they work in a more business-focused way.

For example, in a business simulation, managers might run a company from start-up through maturity, managing finance throughout. This simulation gives them first-hand experience and provides a memorable learning experience to draw on back in the workplace.

An example of a comprehensive Finance for Non-Finance Managers Training may look as follows

5 Days

TRAINING OBJECTIVES

• To assist the Non-finance professionals to raise their awareness of finance and use the added knowledge to make important managerial decisions
• To create awareness on the short term and long term needs of the businesses and offer possible solutions to counter business failure
• Enable the managers to fully understand the profitability, liquidity, and wealth creation and apply the guiding finance principles in improving their businesses.
• To equip the Managers with the current information on the local and international financial markets, risk management, and fraud reduction techniques.
• To enable business owners in assets management and inventory monitoring

FINANCE FOR NON-FINANCE MANAGERS TRAINING CONTENT

Module 1: Introduction – Workshop expectations

• Workshop Introduction, Setting work objectives and participants expectations
• Counter check materials vis a vis the workshop objectives/expectations
• Introduction to Finance and Accounting
• Basic Terms Used in finance
• Group discussion on basic accounting principles
• Understanding of the effective use of Assets, Liabilities and effective management on the same

Module 2: Financial Statements preparation and interpretation

• Financial statements interpretation
• Income Statement, Statement of Financial Position
• The statement of cash flow

Module 3: Decision Making & Budgeting

• Cash Flow vs Profitability
• Wealth Creation for businesses
• Techniques in Analyzing the financial statements
• Budgeting techniques – Budget Development and implementation – Budget monitoring and control

Module 4: Capital Budgeting

• Using financial techniques to make investment decisions from various options presented
• Choosing amongst alternatives projects
• Costing for profits organizations / Companies
• Costing for nonprofit organizations

Module 5: Finance and Administrative Policies and Controls

• Setting finance, administrative and logistical policies
• Setting appropriate internal controls in a business
• Importance of Audit
• Risk and Fraud management techniques

CUSTOMIZED TRAINING

In conclusion, the training can also be customized to fit institution needs upon request. It is also possible to have it delivered at the location that you prefer.

Financial Training For Non-Financial Managers

Financial Training For Non-Financial Managers

Types of passive income in Kenya

Making money while sleeping also known as passive income is one the aspiration of very many people around the world and Kenyans in particular.

The truth is that building a passive income stream usually isn’t passive at first. It requires time, money, skills, or all three.

But where do you start? The question of actually establishing a passive income is very elusive to very many people.

The first step is to just identify the first project and work on it step by step over time until it starts generating an income passively.

Building multiple streams of passive income has tremendous benefits in the long term: it can make you very resilient and better able to weather economic shocks when they come like the covid19 that we are experiencing in Kenya and the rest of the world.

Passive income is a long term choice that requires short term tradeoffs. If you’re willing to commit small financial investment and time, you could be earning effortlessly for years to come.

In this article, I will list some of the proven ways that you can employ to make a passive income in Kenya; the fundamental thing to know however is that it does not come very easily.

Start a Blog

This is one of the main ways to ultimately created passive income. You do this by leveraging on the internet.

But there’s more to making money online passively by blogging than just posting content online.

If you’re looking for an extremely cheap, yet highly scalable way to create a passive income for yourself, you might want to take a moment and read this article, The Ultimate Blogging Guide!

If you can consistently use your blog and create a lot of value for a lot of people, you can generate an extraordinary amount of passive income.

As you post to your blog, more and more, your site will start ranking on search engines bringing in traffic whether you put in any additional time or not.

A blog is the most cost-effective method of creating a truly passive income stream I know of. Hour after hour, day after day, your blog is out there doing work for you.

What’s the catch? It takes time to get it rolling. That’s it. The sooner you start, the sooner an income stream can begin to grow.

Make YouTube videos.

This is one of the newest passive income ideas that is growing rapidly in Kenya today.

The only effort you will need is at the onset is coming up with a video script or idea, shooting the video, and then promoting it.

Once it’s done and it goes viral, it becomes a completely passive source of income.

As long as your video is informative or entertaining, you can monetize them on YouTube. Shoot, upload, and embed Google AdSense to the videos.

When people watch the videos or click on the links with ads, Google will pay you.

In Kenya, for 1,000 views of your video on YouTube, you could get paid about KES 100 (i.e. 1$). This however increases as your viewers increase.

If you can get decent traffic, viewers, and clicks to your videos, then there is also the possibility of getting kickbacks for product or service mentions.

Making money on YouTube passively can take a lot of time and effort, before you earn your first coin on YouTube in Kenya or anywhere else you will need to invest a huge amount of time.

You require at least 1,000 subscribers to your YouTube channel and a total of at least 4,000 view hours before you can even qualify to get paid for Google ad-sense.

Become a Social Media Influencer

Did you know that you can get paid for posting on social media? There are a variety of ways to earn money as a social media influencer.

You can work with companies to produce sponsored posts/content which the company will pay you for.

Typically rates for sponsored posts are calculated by how many followers you have and your engagement rates.

You can also earn income as a social media influencer by sharing affiliate links, writing sponsored blog posts or by hosting events/attending events as an influencer.

Write an e-book

Are you conversant with a particular subject, topic, or issue more than the average person on the street?

Well, you could make money selling e-books.

Of course, developing an e-book comes with a lot of upfront investment in terms of time and/or money but once you have your book out there, it will all be worth the passive income potential for years to come.

A little marketing here and there is all you will need once the book is ready.

You can either write the e-book yourself or hire an e-book writer from Fiverr or Upwork or any of the freelancing sites.

Airbnb

Airbnb allows people to travel all around the world and to stay in accommodations that are a lot less expensive than traditional hotels.

Their site breaks rentals into three categories: private room, shared room, and entire home.
Airbnb charges you 3% on every booking for their services, but you can set the nightly rate at whatever you want. People around the world are making impressive passive incomes through Airbnb.

Build App Or Product

If you have a skill or service that you can share with others, you can build an app or create a product to sell.

For example, if you are passionate about fitness and have a background in creating workouts, you could create a workout app.

You could also create a physical or digital product, such as an e-book or physical book if you would rather do that instead of an app.

Hiring someone to create an app for you can get expensive. If you are willing to learn, you could create an app on your own or barter services. Creating an app or product is a great source of passive income!

Selling products that you create can also be very profitable. Sites like Etsy allow you to sell your handmade, custom, and unique products. It’s simple to set up a storefront and get started!

Being in Kenya, there are so many websites where you can sell your products online like Etsy, Jumia, OLX, which are just a few of them.

Create an online course.

Like e-books, you just need to be better at any one thing than the average person on the street and you can make passive income delivering your expertise as an online course.

These could be skills or expertise acquired through formal training or stuff you’ve learned from experience over the years.

And there are several platforms whereby you can host your online courses such as Udemy, etc.

Print on demand.

This passive income method basically involves selling t-shirts designs for free online through websites such as  TeeSpring, ViralStyle, or Merch by Amazon.

The advantage with these print on demand platforms is that you make money with ZERO upfront cost, without the need for any inventory.

All you have to do is just design the items, and promote them through various campaigns, and make money online without any investment or inventory selling t-shirts.

Once somebody buys your design on a t-shirt, mug, or hoodie, the company makes it, ships it to the customer, and you get paid via Payoneer whatever price you had set up for the item.

Types of passive income in Kenya

Types of passive income in Kenya

Types of passive income in Kenya

Using debt to build wealth

Have you ever thought about using debt to increase your cash flow?

Debt for most people is simply a part of life. It is used to pay for just about everything from homes and cars to everyday purchases such as clothes and groceries data bundles and even airtime.

In this article, we shall start by trying to understand the difference between good debt and bad debt.

There is huge financial potential in strategically using debt to help you achieve short as well as long-term financial goals for both you and your business in Kenya.

Whether a given debt is good or bad depends on several factors. These are the interest rate and the amount of time it will take you to pay back the loan.

Then there is an important consideration which is, what you are borrowing the money for. Equally important to consider is your unique tolerance for debt.

Defining good and bad debt

Basically, good debt is borrowing that helps you build long-term wealth. Bad debt, on the other hand, can harm your credit and deplete your finances. The difference comes down to two factors: risk and cost.

Mobile application types of debts have become the most commonly used debts in Kenya today.

We can equate bad debt with taking on too much risk without the ability to repay it,” says David Mook, senior vice president and chief private banking officer at U.S. Bank Private Wealth Management. “Bad debt is either too risky or too costly.”

Credit card debt is probably the most common example of bad debt globally, credit card debts are not very popular in Kenya, however, on a global scale the average U.S. household owns over $8,000 in credit card debt.

Financial advisers consider credit debt bad debt because of its high-interest rates.

Car loans are another example of bad debt because they’re used to borrow money to buy an asset that depreciates. In general, “Borrowing to support ongoing living expenses is not a good use of debt.”

Good debt may help you accomplish your objectives

Student loans are probably the most common example of good debt, given the correlation between a college degree and higher earnings throughout your career.

But that’s just the start. “Good debt can help borrowers accomplish an objective or help them avoid a bad outcome.

When it comes to accomplishing your objectives, consider another common example of good debt: taking out a mortgage on a new house.

For most people, it’s not possible to pay for a house outright. However, even if you were able to pay for it in one large payment, there are benefits to taking on debt for a home.

Paying down a mortgage results in equity in a home as well as potential tax advantages.

Plus, if you know you’ll be able to make your monthly payment, there is the additional benefit of improving your credit score by making the payments consistently.

Depending on your circumstances and risk tolerance, leveraged investing can be another good debt strategy.

Say you’re investing Ksh10,000 with an expected 10 percent rate of return. If you invested your own money, you would earn KSH 1000.

But if you were to invest half your money and borrow for the other half, you could earn more, if the interest on the loan is less than 10 percent.

Another potentially effective debt strategy involves using a loan to diversify your investment portfolio, especially for certain affluent individuals who hold a concentrated stock position in a single company.

They can borrow against that concentrated position to buy stocks in other companies, making for a more balanced long-term investment strategy.

An added benefit of borrowing against a concentrated stock position to diversify your portfolio is that you may defer paying the capital gains tax you would incur if you sold the concentrated stock.

Good debt may help you avoid bad outcomes

Consider this, a client who owed a large tax payment on April 15, well before June when he was expecting to receive a cash payment.

The client could have sold off some assets in his portfolio to pay the tax bill, but that would have required reconstructing his portfolio afterward, not to mention paying transaction costs and potentially more taxes.

Instead, the client decided to take out a loan to pay the tax bill and then repaid the loan in June.

All this will make you avoid disruption in your portfolio is an example of using debt effectively.

You may want to consider using income generated from diversified investments to pay down bad debts.

After assessing the amount of your bad debts, you may find that it makes financial sense to sell off an asset to quickly pay down your debts. This is where your personal debt tolerance comes in.

Assessing your debt tolerance

Your comfort level with a given amount of debt depends on your tolerance for risk. “It’s important that financial professionals explain the downside of taking on debt to clients so that they can determine how comfortable they are with that risk.

For example, if you borrow to diversify your portfolio, are you willing to ride out a volatile stretch in the market? Also, consider your time horizon.

Are you determined to pay off an investment-related debt in two years, or would you be okay if it took longer? Questions like these can help you assess whether you feel comfortable taking on debt as a part of your investment strategy.

Debt tolerance is different for everyone. “You always want to look at your cash flow and make sure you have enough income to service your debt.

The ability to determine the amount of good debt you should take on is more art than science.

In conclusion, It’s important to talk with a financial professional before incorporating good debt into your financial strategy.

Using debt to build wealth

Bible lessons about money

Bible lessons about money, Personal finance is a very popular topic in our current world, presently there are numerous teachers about managing money in Kenya.

Personal finance books are hot sellers in Kenya today. Bestsellers include such well-known titles as Robert T. Kiyosaki’s Rich Dad, Poor Dad, Dave Ramsey’s The Total Money Makeover are almost a must-read for anyone interested in understanding what the bible has to say about money.

However, there’s one book that’s more popular than any of these and it offers unprecedented advice about money, it is the Bible.

Of course, most people don’t think of the Good Old Book as a personal finance guide. To some, it’s the literal Word of God; to others, it’s a beautiful work of literature; still others view it as a historical text that’s had a profound influence on our society but has little to do with money.

Numerous stories and sayings from the Bible, written thousands of years ago, illustrate basic financial concepts that are as relevant as ever to any Kenyan interested in having a biblical understanding of money.

Bible lessons about money

Proverbs 24:27 – Put your outdoor work in order and get your fields ready; after that, build your house.

This piece of advice from Proverbs seems a little surprising at first. To a modern reader, it’s not clear why planting the field should be a higher priority than building the house, since both appear to be necessities of life rather than luxuries.

However, if you think about it, the answer to the question becomes obvious: Your “field” isn’t just something you need for survival – it’s actually a means of survival.

If you’re a farmer, your crops are your source of livelihood. If your field isn’t properly planted and prepared, you won’t have the money you need to build a house or provide for any of your other needs.

Today, few people rely on actual fields for their income. However, we all have certain basic needs that we have to meet in order to survive.

And to meet those needs, most of us need some form of gainful employment. What good is a house if you don’t have the means to put food on the table, or pay the rent or mortgage?

So in modern terms, this proverb means that you need to set priorities with your money. Make sure you save enough to cover the essentials.

What you need to keep yourself alive and able to work before spending money on creature comforts. In other words, set aside money to pay all the bills before you spend any on new clothes.

2. Make a Budget

Luke 14:28-30 – Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it? For if you lay the foundation and are not able to finish it, everyone who sees it will ridicule you, saying, “This person began to build and wasn’t able to finish.”

This Biblical saying is about budgeting. You know you need to cover the cost of necessities first but those costs don’t always come up right away, so you need to plan for them or make a budget.

Some major expenses, such as rent payments, only come due once per month. Others, like home insurance premiums, only come due once annually. Planning ahead and saving for those intermittent (but known) expenses is a key component of budgeting.

3. Build an Emergency Fund

Genesis 41:34-36 – Let Pharaoh appoint commissioners over the land to take a fifth of the harvest of Egypt during the seven years of abundance.

They should collect all the food of these good years that are coming and store up the grain under the authority of Pharaoh, to be kept in the cities for food.

This food should be held in reserve for the country, to be used during the seven years of famine that will come upon Egypt, so that the country may not be ruined by the famine.

In this passage from Genesis, Joseph interprets a dream the Pharaoh has had about seven fat cows grazing by a river that gets swallowed up by seven skinny cows.

Joseph concludes that the seven fat cows in the dream represent seven years of prosperity for Egypt, which will be followed by seven years of famine.

To plan ahead for this disaster, Joseph advises the Pharaoh to store up grain during the seven good years and use that stored grain to get the country through the seven hard years to follow.

4. Avoid Debt

Proverbs 22:7 – The rich rule over the poor, and the borrower is slave to the lender.

This proverb takes no skill to interpret. It describes debt as a kind of slavery and citizens in many parts of the world tend to agree with this wisdom.

All that debt takes a toll on those who carry it, both mentally and physically. Well documented research now shows that high levels of debt are associated with anxiety, depression, and relationship problems.

Debt can also be linked to high blood pressure, lowered immunity, and a host of physical symptoms, including headaches, back pain, and ulcers.

5. Diversify Your Investments

Ecclesiastes 11:2 – Invest in seven ventures, yes, in eight; you do not know what disaster may come upon the land.

This line from Ecclesiastes is a short, clear explanation of why it makes sense to diversify your investments.

Nearly any type of investment can fall victim to “evil” of some sort, whether it’s a plague of locusts that wipes out a grain crop, or a market crash that reduces the value of stocks or real estate.

So it makes sense to put money into many different types of investments so that a single disaster can’t cost you everything you have.

Old-time wisdom was that, if you divided up your cargo among seven or eight ships, all headed along different routes, the chances that all of them would sink would be very low. So even if you lost one or two ships, you could still hope to earn enough from the others to make a profit.

Admittedly, there are some who argue that diversification is a myth. Their claim is that you can earn a much better return by putting all your eggs in one basket as long as it’s the right basket.

7. Make a Financial Plan

Proverbs 21:5 the plans of the diligent lead to profit as surely as haste leads to poverty.

This final rule from Proverbs more or less sums up all the others. Budgeting, planning for retirement, saving for emergencies – they’re all different ways of being diligent by planning ahead.

Making a financial plan is a three-step process:

1. Identify Your Goals. It’s much easier to convince yourself to save and invest when you have a clear sense of what you’re saving for.
2. Evaluate Your Situation. Next, figure out what your current financial situation is. This is a step you can take on your own or with help from an accountant or financial advisor.
3. List Steps to Take. Now that you know both where you are and where you want to go, all you have to do is figure out what steps you need to take to get from point A to point B.

Without a financial plan, it’s easy to drift through life, earning and spending money with no real thought for the future. Writing out a financial plan, and checking it every few months to see whether you’re on track, helps ensure that you know what you want out of life and are on a path to get it.

Bible lessons about money

Bible lessons about money