Finanical for Management Essay Example | Topics and Well Written Essays - 1500 words

Finanical for Management - Essay Example Statistical data from the Asia Pacific Economic Cooperation reports that SMEs capture a sizeable 95% of business enterprises in the Asian region (De Ramos 2001). The report further states that small business enterprises employ 80% of its total workforce while contributing 60% of its economic output. However, this has not made things easier for small business enterprises. Instead, SMEs are now facing more challenges. Due to their ambiguity of financial transparency unlike the bigger companies, bankers do not seem to trust the SMEs easily. Bankers demand a number of financial requisites from SMEs before allocating their finance, which include an up-to-date financial report with clear profit history, a detailed business plan and a credible management team. Besides, finance companies are also adopting various credit scoring mechanisms replacing human judgment in loan approvals to the small businesses. Bank borrowing is still a significant issue for SMEs. Most of them find it difficult to get it in the Asian region. Therefore, cash management is very important for the SMEs. Small business enterprises are now practising to accomplish bigger profits with smaller investments. Cash is king for small businesses. A business can get successful when there is a considerable amount of investment made in the business at a very low payout. Isabelita Sy-Palanca, president of the Mother Company, Philippines suggests on the mantra of small business philosophy, Cooperation or clustering is a serious concern and a new concept among the SMEs. Different groups of SMEs under similar ventures working together is a common practice now in the financial market of Asia. The main purpose of this collaboration is to combine their expertise and bargaining power. Thus clustering helps small companies with both technology and financial gain. Besides, the concept of competition now involves overseas counterparts rather than the business partners in the region. This further results in