The closing ceremony of LUMS Internship Program 2018 was held at UCO office in Karachi on 3rd August, 2018 The aim of this internship program was to provide high-quality internship experience for BSc Accounting & Finance students in Professional Services.
The role of women has evolved over the years in the society. From joining the corporate as well as the government sector and holding key positions, there is no field as such in which the women counterparts have not proved. Same is the case as to being entrepreneurs, which comes with a lot of challenges when a women decides to be one. The first and foremost being her role in the household whether she is a daughter, mother, wife or a sister. Be it any role but her responsibilities towards managing the family are a hindrance in her professional career. The answer to all those challenges lies in the art of multitasking and that even quite an effective one. As Pakistan is ranked 143 out of the 144 countries in the Global Gender Gap report for 2016 due to the lack of equal opportunities for women and inadequate opportunities for women.
Having said that there are numerous examples around us where women have proved themselves as successful entrepreneurs globally. Anita Roddick, founder of the Body Shop puts it like “if you do things well, do them better. Be daring, be first, be different, be just.” Sara Blakely, who is the founder of Spanx and is the youngest self-made billionaire in America, Arianna Huffington, founder of the Huffington post, J.K Rowling, author, Rashmi Sinha founder of Slide Share are all such examples of women who overcame the fear of failure and left footprints.
The daring women of our country have also made a mark for themselves in various fields. Maryam Adil who is the founder of Gaming Revolution for International development (GRID), Jehan Ara from Pakistan Software Houses Association, Roshaneh Zafr founder of Kashf foundation along with many others. The foremost requirement which women need to overcome is restoration of faith in themselves that they can also make a difference and be a role model for many other women. The only way in which this can be achieved is when a woman realises her own powers. As she is an epitome of confidence and is capable of doing things which no one can even imagine of, women can achieve milestones.
Women entrepreneurs can bring a lot of diversity in the business environment as they have the knack of doing things differently. They are also quite perfectionists and dynamic. Women tend to plan and proceed so they are able to save the time and money of the business as everything works according to a schedule. Also in Pakistan it is expected that one billion women will be joining the global workforce in the coming decade.
The current economic situations requires massive input in order to achieve stability. Many countries which are facing the problems of lower GDP generation can benefit from women lending hands towards the economic stability. Moreover the global economic conditions requires the promotion of entrepreneurial thinking and entrepreneurship. This can be easily achieved by providing opportunities to women entrepreneurs. According to President Women Entrepreneurs Association of Pakistan (PWEAP) Anum Kamran almost 95% of the women in Pakistan are not working to their true potential.
Although women entrepreneurs are a great contribution to our society and an emerging trend globally but it still has grey areas which needs to be addressed. Firstly adequate training and access to the required resources need to be arranged to enable the business to expand. Secondly the support required from their immediate families to step in to the field of entrepreneurship is another major problem faced by the women entrepreneurs. Still many societies discourage women from entering this field as it is male-dominated. Moreover, since women have a lot of responsibilities towards their families they are not able to take a break from that. Multi-tasking is not as easy it sounds therefore it becomes quite tough for a women to look after her home and business. Even if they are able to manage both simultaneously, time constraints lead to one aspect being compromised over the other. So it is a lot of balancing act which a woman has to do in order to become successful entrepreneur.
It is important that the government also works towards this aspect in order to facilitate the potential women entrepreneurs. Incentives should be introduced in order to encourage these women to be confident enough to start their own businesses easily and also manage them effectively. Also introduce trainings and other necessary resources so that women can easily manage their responsibilities.
Having women entrepreneurs can impact the society in a really positive way. Empowering women to step outside and giving them an insight of the real world can benefit the future generations as well. As the saying goes “educate a man and you educate one person, educate a women and you educate the entire generation.
By: Madiha Kauser
ACCA is currently working as a freelancer. She is a blogger, article writer, and editor. Her interests include reading and research.
“When women participate in the economy everyone benefits”
(Hillary Clinton)
Those who favor diversity perceive that women recruitment on board is a “strategic necessity”. Women can make specific contribution to an organization. A multilevel analysis of a large US dataset shows that there is indeed a large and robust difference between male and female personalities.
Females score higher on sensitivity, warmth, apprehension, and more risk adverse
Vs.
Men score higher on emotional stability, dominance, rule consciousness, and vigilance.
Equality between women and men is always in discussion especially when it comes to employment and occupation. Women have been struggling for the opportunity to break into company boardrooms in the developed and developing countries across since last quarter of twentieth century. However, female board members remain in the minority, their numbers are steadily growing. That is one of the reasons that some countries make it as part of corporate law to adopt a considerable number of directives on matters such as equal treatment in employment and occupation.
In 2003, Norway was the first country introduce 40 percent women quota on listed companies board followed by France (33 percent) and Germany (30 percent) among others. This is emerging trend and rest of the countries including Asian countries such as Pakistan, India, Malaysia etc. has followed this rule for listed companies to have women on board in their code of corporate governance regulation where women hold just one in eight seats on the boards of Asia’s largest public companies.
The Graph represents Global Women presentation on board.
Source: https://corpgov.law.harvard.edu/2017/01/05/gender-parity-on-boards-around-the-world/
Since 2004, Egon Zehnder has tracked gender diversity through the Global Board Diversity Analysis (GBDA) to examine trends across the boardrooms of the world’s largest companies to gain a global understanding of gender diversity. The 2016 GBDA is the firm’s most comprehensive to date, evaluating board data from 1,491 public companies with market caps exceeding EUR 6bn across 44 countries. The graph shows the slow but positive gender diversity progress.
Gender Diversity Index (GDI) reports indicates that women now hold more than 20% of the board seats of Fortune 1000 companies. They also indicated that smaller companies have poorer diversity records than industry leaders. The growth of women on board in Fortune 1000 companies is increased over the years.
Source: https://www.2020wob.com/companies/2020-gender-diversity-index
In Asia, women hold just one in eight seats on the boards of public companies. Asia lags behind Europe, where women hold 30 per cent of board seats at the top 500 companies, and North America, where fifth of board members at the 500 largest public companies are women.
There are many reasons for the low representation of women in top positions in boardrooms across Asia such as in-built corporate norms, practices of extremely long working hours and childcare burdens that still fall on women. As per “Corporate Women Directors International”, Women hold 27.2% of board seats in Australia and take lead on female directors in comparison to other countries in Asia.
In the past few years, many Asian countries such as Malaysia, India, Pakistan etc. introduced quota of woman on the board of all publicly listed companies. In 2011, Malaysia introduced a quota of 30% women directors which increased the proportion of female directors from 7.6% in 2011 to 16.6% in 2017. In 2013, India introduced a quota of at least one woman on the board of all public listed companies resulted the proportion of female from 5.5% in 2010 to 12.7% in 2017.
Women on Board in Pakistan
In 2017, Securities and Exchange Commission of Pakistan (SECP) issued the revised Code of Corporate Governance under the new Companies Act 2017 that requires Board of Directors shall have at least one female director on the Board of all public listed companies and also provide training to one female executive every year under the Directors Training Program.
The goal is set to double the percentage of women directors from 6.4% to 12.8% in three years. Currently, according to the KSE 100 index of Pakistan Stock Exchange (PSX), 69 out of 100 companies have no woman directors which include 16 out of the 20 largest listed companies. The proportion of women directors on the boards of listed companies is only 6.4% whereas women representation in Pakistan’s parliament is 17.2% and 15.8% in the labor force. It is also much lower than the proportion of women directors in the companies in S&P 500 and FTSE 100, which now ranges from 20% to 25%.
Another initiative taken to increase women representation is through the launch of The Women on Board Pakistan (WOB) by South Asian Federation of Exchanges (SAFE) in February 2017. Their mission is “to address the acute imbalance of women professionals on the corporate boards and higher management hierarchy in Pakistan”
52% of Pakistan populations consist of female but their presentation on board is very negligible. In 2017, WOB conducted a research of 505 companies listed on PSX stated that the total women directorship is 9.07% but only 0.83% is unrelated or professional women directors. The remaining proportion of 8.25% is family/ related women directors. In terms of chairperson positions, women are holding 7.13% of total chairpersons’ positions but only 0.40% (two chairperson positions) is unrelated or professional women chairpersons. Overall, women hold 11 CEO, 9 CFO, 27 company secretary positions in the 505 companies listed on PSX.
Since the start of Director Certification Program in 2007 by Pakistan Institute of Corporate Governance (PICG) only 162 women have been certified from the program. 73 of these qualified women are serving as directors on boards of listed companies.
The WOB research shows that companies in Pakistan are hiring related women to fill in the positions and shows gender diversity on their board and top management. It is the time to change the mindset and bring the professional women on board to comply with regulations of having one female director on board to create a culture of corporate change and diversity rather than inviting women to fill the quota. Catalyst conducted a research that shows that corporate boards with woman/women have a 36 percent better return of equity in comparison with those that have all-male.
Women contribution is globally recognizing in all sectors. It is time to change the mindset of gender differentiation and utilization of women potential in development and growth, politics, research and developments, etc. of country. It is very important that government and policy makers should focus on education and training for women to make them capable of playing their role in country development in all sectors. Organizations also need to incorporate gender diversity in their strategic planning and adopt in a corporate governance policies.
“If you want something said ask a man; if you want something done ask a woman” Margaret Thatcher
references:
https://www.fastcompany.com/3067983/this-is-the-state-of-gender-diversity-on-boards-around-the-world
https://30percentclub.org/assets/uploads/UK/Third_Party_Reports/2016_GBDA_DIGITAL_FINAL.pdf
https://www.ft.com/content/1b0d7abe-33ff-11e7-bce4-9023f8c0fd2e
http://picg.org.pk/wp-content/uploads/2015/10/Women_in_Corporate_World.pdf
https://corpgov.law.harvard.edu/2017/01/05/gender-parity-on-boards-around-the-world/
http://wob.com.pk/downloads/WOB-Annual-Report.pdf
Good governance is important for long-term stability, sustainable growth and efficiency of operations of the organization. In the absence of, or with poor governance, an organization is destined to experience frauds, unexpected highs and lows in business volume and profitability and eventually business failure. This primary objective of sustainable growth cannot be achieved unless the accountability and performance measurement tools are not maintained. Corporate governance is one of such tool which provides guideline to organizations. Corporate governance increases the confidence of shareholder and has positive impact on value of organization. Good corporate governance secures the corporate image and helps in achieving the competitive edge in market. It improves management of capital, risk and long term objectives.
In context of small businesses, which usually do not have extended level of strategic apex; corporate governance provides a guide and acts as a safeguard against existential threats to the entity. This is achieved by managing risk by balancing power through division of responsibilities, maintaining internal and external processes of control and maintaining corporate relations with financial institutions. Small business need to address these questions as soon as possible but it does not happen as an event; it is always a process. It starts by addressing the most material risks first. For example, a system of internal control implemented by professionals after thorough study of the operations serve as a safeguard against risk of fraud and errors in financial information. Similarly, a rigorous set of reporting structure designed by professionals after collecting the information needs of all the stakeholders serves as efficient business planning and monitoring tool.
Board of directors are accountable towards ordinary shareholders of the company. However in case of small business, where shareholder or their nominee assumes the role of a director, usually do not feel accountable towards other stakeholders. Their powers are not restricted towards inspection of books of accounts only. They influence the daily running of operations of company and managing the staff to whom this responsibility is delegated. Financial information presented by management to directors is used by them for analyzing the current financial performance of company and future prospects are based on that presented information. When managing director is also the shareholder of company, as in case of small businesses; the potential conflict of interest may arise between the management staff and the shareholder. Therefore, it is necessary that small business shareholders shall not control the way operations are carried out in organization in order to ensure transparency and accuracy of information presented to them for decision making.
Beside this, management staff in small businesses is the only source which can ensure compliance with laws and regulations required for achieving purpose of corporate governance. Their role shall not be hindered by owners of business which may display potential threat towards corporate governance. In order to achieve goal congruence, the owner’s objective shall not have conflict with objectives of management staff which have responsibility of foreseeing cash position and maintaining books of accounts. For example, payments against sales and purchase cannot be sanctioned without considering the cash position of organization. During periods of financial crises, considering the position of cash, the management may suggest the owners to obtain short term or long term loans from banks for purpose of meeting financial obligations and for securing interest and corporate image of organization. Or contrary to this, the management may suggest the owners to revise its credit policies instead in order to prevent to company from becoming highly geared in future. These both decisions are highly dependent on information that is produced by management. Thus, management staff integrity is also another important factor for achieving corporate governance objective. All the accuracy and completeness of financial data are based on calculations performed by management. Financial information presented in form of valuation of assets, liabilities and estimates are also based on judgment of management. Management integrity will ensure that information presented is true and not based on false assumptions or data.
Another important factor for achieving corporate governance objectives in small businesses depends on performance of system of internal controls that are embedded in financial function of organization. The accuracy of data is dependent on efficiency of system of internal controls and their design effectiveness. In case of small business; the internal control system needs not to be very complex but rather it needs to meet the objectives of business as well as all the compliance requirements with laws and regulations that governs the business. Code of corporate governance is mandatory in case of listed companies. However, small businesses can also benefit from it by following the guidelines that are for best interest of company.
As per Wikipedia, budget (derived from the French word bougette, meaning purse) is a quantified financial plan for a forthcoming accounting period. The process of arriving at this plan is called Budgeting. Simply put, budgeting is making estimates of one’s future inflows and outflows for a specific period of time and ensuring the availability of sufficient funds to perform desired activities. The revenues and expenditures can be estimated on a periodic basis, say monthly, quarterly or yearly and summarized in a spending plan based on previous trends.
The importance of budgeting cannot be over-emphasized, be it at a personal, corporate or government level. Individual, corporations and governments are faced with similar challenges in the form of scarcity of resources and highly unpredictable futures. Thus it becomes imperative not only to think and plan ahead but also to prioritize. Thus the significance of budgeting as a planning and controlling tool is crucial. Budgeting requires a clear bifurcation between needs and wants. It is a tool for ensuring that the needs are firstly met without jeopardizing the individual’s or company’s sustainability.
Personal Budget
On personal level, when incomes are limited and usually restricted to one earning member of a family, budgeting ensures that the basic needs and expenses like housing, education, utilities and grocery are given priority and catered to. In today’s world, where competitions are tough and layoffs are highly anticipated across all levels and industries, budgeting can help meet not only the current needs but ensure that savings are kept aside for any unforeseen calamity. Devising a spending plan can ensure that the household does not run into a debt or can actually help in strategizing a way out of an existing debt. More often than not, the tasks falls on the wives/ mothers who master the art of budgeting while running their households.
Budgeting does not necessarily mean missing out on your wants and curbing your wish lists. On the contrary, it helps in devising a sound and strategic plan to go about the finances in an optimal fashion; ensuring spending within available limits, with a penchant for saving as well.
Graphically a personal budget can be represented as follows:
Corporate / Government Budgets
Similar is the case with corporations and governments when tasked with budgeting but on a macro level.
There are multiple facets to budgeting in an organization where respective divisions and departments including human resources, IT, operations, marketing, sales etc are tasked with making their respective departmental budgets. The main aspects of these budgets based on past figures are:
The past trends assist the departments in making fair judgments of when to anticipate high or low sales volumes including which periods would require extravagant outflows of cash. The departmental budgets are then rolled out into a master corporate budget.
Corporations usually make two types of budgets: static and flexible one. In the static budget, the figures for sales and revenues, cost and expenditures, assets and liabilities remain constant. Such a budget helps the organization to compare the actual performance of sales and expenses against the estimated projections and measure variance. The flexible
budget gives room for updating the projected estimates as events unfold and corporations are able to make more reliable and realistic assumptions.
In the absence of a budget, companies are usually clueless and shooting in the dark. A budget helps in monitoring the company’s performance. If the actual sales generated and costs incurred are in line with the budgeted estimates, it portrays that the management knows its game and can accurately predict external variables affecting its work environment. However, if the budget estimates vary greatly from the actual figures, the management needs to stringently revisit the assumptions used to generate the budget as well as re-evaluate the surrounding environment for factors having positive as well as negative impact on its operations.
Budgets are inevitable in helping corporations operate effectively and efficiently. A surplus budget indicates that a company anticipates profits at year/ period end. This allows room for investments or capital expenditures and builds up on the earning per share and projects a company’s positive image. A balanced budget indicates that the company anticipates breaking even. Whereas deficit budget estimates the expenses to exceed the revenues. Such a budget allows the companies to look for avenues to secure debt in case it foresees a deficit for meeting operational requirements or capital expenditures.
Categorically, the most important budgets prepared by corporations are:
Sales budget: estimates of the forecasted sales usually in terms of number of units as well as value.
Capital Budget: estimates of the company’s investments in fixed assets, machinery, research projects etc.
Cash Budget: estimates of company’s cash receipts and expenses usually assisting in meeting the working capital requirements.
Similarly, governments task the finance ministers to make budgets based on estimated tax revenues, export incomes and probable outflows for development expenditures and import payments broadly speaking.
Thus budgeting plays a pivotal role in ensuring that cash management for any individual, corporation, government is streamlined and any anticipated challenges are timely addressed.
By: Amina Tariq, ACA
Amina Tariq, a qualified chartered accountant who is open to accepting new challenges.
Her experience ranges from aviation industry to audits across multiple sectors.
Industrial revolutions have remarkably transformed the social, economic and environmental dynamics of the entire world. Whereas the first three industrial revolutions brought tremendous growth around the globe, the world now stands on the edge of a technological revolution that will redefine the social and developmental aspects of life. Over the past two decades and with the introduction of cellular mobile phone in early 90’s, Pakistan Telecom has achieved importantmilestones which are necessary to take benefit of fourth industrial revolution. Among many developments in various economic sectors, e-Commerce is a significant driver of digitalization.
To promote e-Commerce and financial services in Pakistan, regulations regarding Framework for Payment System Operators (PSO) and Payment Service Providers (PSP) have been developed and approved by the State Bank. An ‘e-Commerce Policy Board’ has also been framed by the Ministry of Commerce. Such measures have brought some international e-Commerce giants such as Alibaba to Pakistan, which will provide an international platform for local products and promote e-Commerce within the country. According to the PTA annual report 2017, the existing size of Pakistan’s e-Commerce market is $60-100 (2015) million which is expected to expand 10 times i.e. up to $ 1 billion by 2020.Through many Business to Consumer (B2C) start-ups in private sector, in Pakistan the consumer behavior has changed considerably. Even though the e-Commerce industry has flourished over past many years, it is still largely depended on cash, which is obvious from the fact that 95% of e-Commerce transactions are done on cash on delivery basis. Online stores such as olx.com, daraz.pk, shophive.com, homeshopping.pk and goto.com etc.have set the trend in Pakistan for many new businesses to follow. With the idea of discounts and promotional deals on various occasions they have further improved the prospects of e-Commerce. Based on the concept of online buying and selling, many user friendly websites have been created for users to list their moveable or immovable properties for sale. Pakwheels.com and zameen.com are two such examples where automobiles and property is sold respectively.
These online operations have created opportunities for foreign investments in Pakistan. According to PTA following funds were recently invested in Pakistan.
| e-Business | Foreign investors | Amount invested |
| Daraz.pk | Asia Pacific Internet Group (APIG) | $55 Million |
| Zameen.pk | Catch Group and Frontier Digital | $29 Million |
| Careem | Abraaj Group | $60 Million |
| Rozee.pk | VostokNafta andPiton Capital | $6.5 Million |
In a country like Pakistan, with a population around 200million, only 41 million people have access to internet, where only 5 million people shop online catered by 2000 e-retailers.
When compared globally the market size and figures are relatively small, however with increasing potential. In terms of Business to Business (B2B) e-Commerce the software industry is making smooth progress. With the size of approximately $530 million it aims to achieve a target of $ 5 billion by 2020.
Nevertheless with the fourth industrial revolution Pakistan is making every effort in order to compete globally, there are still many barriers that need to be removed. Consumer/seller protection for e-Commerce transactions in terms of quality and reliability of products as well as payments has to be ascertained. It is also prerequisite to provide low cost secure internet service across the country to increase the internet shoppers and business opportunities. The overall infrastructure for e-Commerce has to be established and made reliable up to the satisfaction of users and international standards.
By: Sahrish Wajahat
A freelance consultant, with more than 8 years of post-qualification experience. Served in various capacities at several external/internal audits, accounting reviews and consultancies of development, educational and government sector.
Even in this contemporary world where mankind has splendid credits to its name for all sorts of technological development yet the very basic aspect of human society in form of ‘gender equality’ is compromised. The understanding and recognition of the fact that women deserve the same quality of life as of men at large have rarely been educated and accepted. Without equal status in society, improvement in quality of life can never be achieved, particularly where half of the world’s population comprises of women and girls. Through continuous human efforts in different part of the world in both, developed and under developed countries several rights which were previously regarded solely for men, have been extended to women. Nevertheless, the complete eradication of gender disparity is still in its early stages in many parts of the world.
According to an analytical report1 issued by the World Bank, out of 141 countries, 24.1% countries have no legislation on domestic violence, where as 13.5% countries have no legislation that specifically address sexual harassment. In the chart below; a data has been drawn to further quantify the lack of protection against sexual harassment in employment, education and public places over a period of time;
Even though the figures depict slight improvement, there are millions of women lacking legal protection against sexual harassment for 2017, in employment, education, and public places are at 362 million,
1.5 billion, and 2.2 billion, respectively. The report further defines the economic violence that is faced by women whereby they are forcefully restrained from working and having an independent source of income. A recent report2 issued by UN Women provides that there are 18 countries where husbands can legally prevent their wives from work. In other words in those countries the economic violence is being protected by the country’s law and establishment.
The international humanitarian organizations in consultation with local bodies have been collecting and analyzing immense data since decades and setting achievable goals from time to time. However due to the gravity and complexity of the issues pertaining to gender disparity the complete eradication has not been achieved as yet.
Gender equality can be enhanced by increasing women’s decision-making and participation in economic, political and social processes. Encouraging them to build opinion, access education and have a voice in matters that affect them in any way. They should be given better access to resources in form of improved level of education and skill. As per a data fact sheet of UN Women report2, worldwide there are more male internet user than females. Both genders are worthy of equal opportunities in terms of health and safety. Unfortunately, in the year 2015, 303,000 women died due to pregnancy related issues, similarly in almost two thirds of countries, women are more likely than men to report food insecurity.
The International Labor Office reports3, the gender wage gap is as wide as 23%, which further explains why women and girls are over represented among the poor. There are disparities even in hourly wage rates and have been documented in the report to be 10%, which means women earn 90% of what men earn. Along with the need to fulfill the social and personal responsibilities, there are many other factors attributed to explain the wage gap prevailing in the world, such as education, age, undervaluation of women work, practice of discrimination, and career breaks. The progress in minimization of this gap is slow and it can take up to 70 years to remove the gap completely. The issues such as gender pay gap cannot be correlated to a country’s social or economic development, rather it pertains to many economically developed countries as well.
Despite the fact that in many countries these days, women have the required education and skill set for the jobs, yet they face multiple barriers and lack equal involvement in labor market. Similarly, the retirement benefits are not at par and around 200 million old women are living without any regular pension income which turns out to be 85 million more than the men living without regular pension income in the world.
The current reality of gender equality might still be bleak, however as compared to the past progress has been made in a number of areas. Ending gender disparity is the utmost human right and both men and women deserve equal opportunities. There exist inequalities in participation in labor market, wage gaps, availability of economic resources, decision making authority and representation, likewise the underlying issues of sexual and economic violence need to be resolved. The issues are so deep rooted that it requires nothing less than a radical change in underlying thought process. Institutions at large should commit to basic awareness of human rights in terms of gender equality and provide for social justice and inclusivity, as well as the governments should take every possible measure in order to eradicate the unjust social phenomena, only then the equitable distribution of economic gains can be ensured and a just society can prevail.
By: Sahrish Wajahat
Sahrish Wajahat ACA
A freelance consultant, with more than 8 years of post-qualification experience. Served in various capacities at several external/internal audits, accounting reviews and consultancies of development, educational and government sector.
A business plan is a sneak peak of the future of your business. It is a kind of written statement of the future of your business. It is a document which describes the plan and the necessary resources to carry out that plan. As Benjamin Franklin puts it “If you fail to plan, you are planning to fail!”
In the modern era of technological advances it has become important to have a business plan. It is necessary to have a written, clear strategy in order to clearly communicate the vision of the business to the investors who are interested in investing. The key is to keep it simple yet having all the necessary and adequate information in order to be convincing and promising. This can help to communicate with other stakeholders of the business as well.
For new businesses, a business plan is the best way to ensure that whether the business idea is feasible or will do well in the long-term. It also helps in understanding and studying the market. Not only this, but a business plan also aids to form a strategy for the new start-ups in the form of viability and future stability. It is kind of a safety net for the new business and will determine the future prospects of the new business.
Another aspect in which a business plan can help the business is when it is deciding to expand or looking for other avenues in order to diversify the business. It will also help the entrepreneurs who are looking forward to explore other markets for their business, by providing a clear roadmap towards success. In other words, it helps to formulate the strategy of the business. Since it focuses on both financial and operational objectives of the business it can provide a guideline to the business about crucial areas such as budgeting and market planning.
When a business requires capital for operational and expansion activities and approaches any financial institution it cannot attain a loan without a formal business plan. It is a mandatory requirement for any business seeking to obtain loan to have a business plan so that the financial institution can assess the repayment ability of the business. Having a business plan can increase the chances of getting financial loans from these institutions and which in turn help the business to expand.
Moreover, a business plan can help the business to secure any other professional support required such as lawyers, consultants, leasing arrangements or accounting services. A business plan also helps to provide a guideline to the key personnel of the business such as executives, managers, and other employees who possess strategic responsibilities of the business. As it clarifies the objectives of the business so that everyone in the business works on the same pattern in order to achieve success.
The increasing competitive environment in which the businesses are operating makes it necessary to have a business plan, so that the strategy of the competitors can be easily analysed and timely response can be formulated. This in turn will help the business to position itself in the market and identify those areas which are not yet explored.
What constituents make the business plan outstanding?
The approach you follow to write your business plan makes it distinguished and understandable for your possible readers.
The first aspect to include in the business plan is the Executive Summary. It is a summary of the key elements which are included in the business plan. Since it is the first thing which the readers will set their eyes on, so it is very important that this section contains all the headings which are included in the business plan.
An industry overview is an integral section of the business plan. It contains the market trends, major industry players, and an estimate of the industry sales. This section also includes a summary of the company’s position in the industry.
Market Analysis is the study of the market in which the company wants to launch its product or service. This is a detailed study containing the geographic location of the company, demographics as well as the steps required in order to be recognized in the target market along with the resources required for it. The tone of this section must be convincing enough in order to give an idea to the potential readers that, the company is well-aware of its customers, target market and is able to make a sales prediction as to how well the company will do in terms of revenue.
The interesting section of your business plan is going to be the competitive analysis in which the analysis is being done of the competitors directly or indirectly. It is an assessment of their competitive advantage along with the strategies to be used in order to overcome the entry barriers of the target market. It is preferable that this section must persuade your readers that the company is offering some really distinguished products or service as compared to its competitors. This will build the investor confidence and will give an assurance that the business will do well in the long-term.
Marketing plan is yet another crucial aspect of the business plan. It is a detailed study of the sales strategy, advertising campaigns, promotional activities and the long-term benefits of the company’s products and services. The unique selling points of the business must be included in this section which must contain points about how the company is willing to introduce its products or services in the market, distribution channels, the way it will be marketed to the potential customers.
Along with these sections it is important to include the financial plan which will brief the readers about how the business is willing to meet its financial needs. It must contain the income statement, balance sheet and the cash flow statement along with the necessary notes to the financial statements.
Other than that factors which will make the business plan attractive is its appearance, tone, and the placement of the sections. All in all this document must be such that it does wonders on its own and the readers are impressed after going through it. As it is rightly said “looking successful is half the battle to being successful”.
By Madiha Kauser-
ACCA is currently working as a freelancer. She is a blogger, article writer, and editor. Her interests include reading and research.
Technologies and Robotic Process Automation (RPA) is going to change the way work is done in offices and the predictions are that millions of jobs will disappear. There is even an article that states “once account-keeping itself becomes fully automated and reconciliation functions become superfluous, both those who keep the books and those who audit them will be out of work. Machines will input the financial data, analyze the financial data, and audit the financial data—all within a few minutes, if not seconds.” This article address this issue and how we need to change and update our knowledge so that technology is used for benefit of employees and companies not just only corporation that want to increase their profits and cut costs at the expense of the workforce.
First we need to understand what Robotic Process Automation (RPA). The easiest way to explain RPA is that it stands for digital labor and it relates to work that is repetitive, can be automated and involves activities such as copying and pasting data between applications, reconciling and cross-referencing data between different systems, etc. It does not end there. RPA can also be programmed to make high-level decision at certain key points in the business process.
RPA systems also have direct interactions with customers and employees. In the USA my pharmacy’s RPA calls to inform me when my prescription needs a refill and if I require it to press ‘Y”. The RPA also informs me when I ran out of refills and offer to call my doctor for the renewal of the refills. Once my refill is ready for collection the RPA sends me a message giving time and location of delivery. If I do not receive the initial call the RPA will call again and again at different times. If I still do not receive the call it will send me a text message.
Thus, common tasks previously done by humans are now done by RPA much more efficiently. In the USA these systems are currently processing customer insurance claims or setting up new employees with the right level of IT access.
RPA gives companies many advantages such as improving the quality, flexibility, speed and agility of the task. This results in an increase in the economic value of the company.
While it might appear that the workforce will not be happy, just like the weavers who broke the looms that took away their jobs I hope this time story might be different. This can only happened if all of us develop the right attitude that that technology is all about helping people, and not only about making more money.
As organizations use RPA projects and get comfortable with digital labor, it will become a stepping stone for companies to use machine learning or other forms of artificial intelligence for more creative initiative that could results in more jobs. Amazon had added 30,000 robots since 2014 and yet at the same time the number of jobs has increased. In 2017 alone nearly quarter new million employees were added to its headcount, the largest in a single year. Yes, the warehouse jobs went down but call center jobs increased.
Consultants and firms are springing up that review the company’s processes and help them automate everyday tasks and thus make their businesses more productive. If you go to Oracle’s home page you will see a robot shaking hands with a human with a promise from Oracle to help your company to automate all mundane tasks and free up critical resources.
The Management, Finance and Audit all play a very important role in connection with RPA. It must be remembered that while tasks are automated and taken over by RPA the risk and responsibility will always remain with Management and Finance. Thus, the initial risk of the process remains the same except now the risk mitigation measure must be built into the RPA system.
As auditors we must be able to understand that certain risk will go down like compliance risk but also that there might be other new risk in the processes that are automated and hence ensure that the Management and Finance departments understand these risks. While as a robot will perform the task with great accuracy but if an error occurs it will consistently repeat the same error which would result in a widespread issue. This might happen when a business process changes, but the robot is not modified. The other potential risk is if someone gains unauthorized access to a robot and altered authorization processing.
Auditors need to review the control environment and the risk mitigating measure built into the control environment. This will result in new auditing techniques to test the new automated processes. This is also a great opportunity for the audit team who can also use RPA for testing of controls and identify activities that that will being more value to the company if automated. Hence it important that Audit team is involved from the beginning to review the controls and risk mitigation measured at the implementation stage.
Hence the auditors must constantly be reviewing the risk assessment of the company and identifying new areas of audit at the same time new auditing techniques and skills need to be acquired to keep current with their jobs. This is also true for other staff as well. If companies are not ensuring that their staff are aware of the new techniques this needs to be pointed out to the management. A classic example is how the old system of advertisement will be replaced by Facebook, twitter and other social media sites by the company. This means that audit now needs to review and audit these areas to ensure that there is no potential risk.
Job Loss due to Automation and our role
Tim O’Reilly the author of “What Is the Future and Why It Is up To Us” has a very positive attitude. He says that “Technology is the solution to human problems, and we won’t run out of work till we run out of problems”. It depends on how it is used. Take the example of Uber and Airbnb, who have used technology to provide jobs and incomes of to thousands of drivers and house owners.
20 year ago Linus Torvalds developed an open source software “just for fun.” It was free, and he allowed programmers from every continent to further enhance it. This is the world’s most collaborate effort and this free software is used in every continent including Antarctica and outer space (via NASA). This software powers 98% of the world’s super computers, and millions of Android mobile phones and consumer devices. It has help huge companies to spring up who in return employ millions of employees. Yes, I am talking about Linux. Two of the largest companies that are built on it are Google and Amazon. We all use Linux in our everyday life and get cost effective products thanks to Linus Torvalds. Yet very few of us have heard his name.
Torvalds believes that information does not want to be free but wants to be valuable. By giving his software free and allowing other programmers to work on it, he made his software better and created opportunities for millions.
We as auditors must make recommendation that will not only increase the productivity of the company will also create opportunities for the workers and society. The most powerful companies are companies that give their services for free. We have the examples of Google and Facebook in front of us. Google economist once said “the best investment we can make is to invest in other people children!!!”.
I am a very positive thinker and it is up to us if we lose jobs or transform jobs. In this connection I would like to look at the changes that have taken in the last 50 years and how with the development of technology lots of jobs disappeared were replaced with new ones is very encouraging. Let’s take a quick review how jobs in firm and companies changed over time and how old jobs were replaced with new ones and the number of jobs increased.
In 1979 when I joined AFF to do articles I spent the first six months drafting and proof reading, it was a most boring job and only the light at the end of the tunnel kept me going. AFF had huge typing pools and dispatch centers. Staff with fast speed on the typewriter were in great demand. With the introduction of the desktop computers, word processer and spreadsheet, our learning skills changed we learned word processing and using spread sheets and soon the typing pools disappeared. This however increased our efficiency and productivity.
I jointed Citibank Dubai and was given the task of automating the central liability. With each automation, we became more efficient and could deliver better services to our customers.
We as auditors need to ensure our technology knowledge is in line with the market, identify areas of new risk and ensure we audit them.
At UCO we can help our clients by:
AN INSIGHT
We are now in an era where new discoveries and breakthrough in science is one of the most heard of phenomena’s .An ever expanding demand for healthcare and the emergence of a newly growing global market has pushed the pharmaceutical industry to invest highly in research and development. Ground breaking discoveries and cutting edge technology have led to the creation of low cost, effective and viable drugs. The global pharmaceutical industry today is worth USD574 billion, standing and it’s highest and is still predicted to grow in future.
Pakistan is the 8th largest pharmaceutical manufacturing industry in the world.Thesector has emerged and grownfrom a point of nonexistence in the 70s to now where it comprises of 800 pharmaceutical manufacturing units including those operated by 25 multinationals present in the country. The major manufacturers being Pfizer , GlaxoSmithKline , Norvatis and Getz Pharama to name a few which hold the majority of the share of the market. These companies are represented by several different organizations, with the Pakistan Pharmaceutical Manufacturers Association and the Pharma Bureau being the main groupings of the sector. The current estimated size of the market is said to be USD2.6 Billion. This also makes it the 7th most attractive market in Asia. The industry also accounts for USD 1 billion exports majorly in the developing Asian market. Prime exporting countries being Afghanistan and Tajikistan.
The industry has shown significant growth in the last decade. Companies have spent a substantial amount on improving and reengineering. The local pharmaceutical industry today is capable of manufacturing a wide variety of products ranging from pills to sophisticated drugs and other chemically complex compounds. The industry through utilizing its utmost capacity is also able to cater for and meet 70% of its local demand for manufactured medicine. Drugs are produced under the Drug Regulatory Authority of Pakistan and in accordance with international standards whilst being low price and affordable.
Despite the fact that Pakistan faces intense competition from its neighboring countries, the sector is looking forward to increasing its exports in the near future. An 11 member pharmaceutical trade delegation was also sent to Cambodia and Vietnam by the Trade and Development Authority of Pakistan to further explore markets segments and future business prospects.
Although we see an uprising trend in growth,Pakistan’s pharmaceutical spending even today only account for 1% of the Gross Domestic Product. The industry gravely requires further growth and investment on behalf of the government. More than 50 % of the country’s population has no access to modern medicine and facilities. In 2014 healthcare expenditure amounted to USD 6 billion where over 60% of it was accounted for by private spending’s. The country’s populations would highly benefit if the government would invest in local pharmaceutical production capabilities which in turn would increase domestic productions and cater for local demand.
The growth of the pharmaceutical industry of Pakistan is a clear indicator of success and an achievement one can clearly triumph upon. A success story in the making the industry is both self-reliant and technologically strong. With lot of growth prospects and multiple windows of opportunities available to the sector we can clearly envision a strong and reputable position in the global sector. The Pakistan Pharmaceutical Manufactures Association have clearly defined a “vision 2025” for the industry under which exports of medicine have said to reach USD 5 billion in the next decade .Not only making the industry autonomous but also well equipped to take on the international market by a storm.
