MODULE 4

ACCOUNTING
& FINANCIAL MANAGEMENT
Atty. VERSELIE E. LIMOS
3 August 2021
Region No. IV-B – MIMAROPA
 I. INTRODUCTION
AND CONTEXT SETTING
I. INTRODUCTION AND
CONTEXT SETTING
• Why accounting and finance management?
v KNOWLEDGE of BASIC ACCOUNTING and
FINANCE MANAGEMENT is a VERY BIG ADVANTAGE
and LACK of it would be TOO RISKY because
resources (hard earned money/
investments/capital) are at stake to be
unaccounted for or be wasted unnecessarily.
v “Spend to learn than to spend to waste”
I. INTRODUCTION AND
CONTEXT SETTING
• Why accounting and finance management?
• Keep records of buying and selling on credit, so
that people cannot trick you;
• Keep records of money coming in and going out of
a group project and thus prevent abuse of funds
and avoid mistrust amongst group members.
• Aid in achieving financial goals. By comparing your
actual record with your planned budget, you can
determine if you are on the right track during your
business year.
• Aid in securing business loans and grants.
• Makes preparing tax returns so much easier.
ACCOUNTING & FINANCE MANAGEMENT
TIME MINS. TOPICS
1:05 – 1:10 5 I. Introduction and Context Setting
1:10 – 1:15 5 II. Accounting vs. Bookkeeping
1:15 – 1:30 15 III. Basic Bookkeeping
1:30 – 2:00 30 IV. Financial Statements
10 A. Simple Income Statement
10 B. Simple Cash Flow
10 C. Balance Sheet
2:00 – 2:15 15 VI. Evaluating Investment Opportunities/Options
2:15 –2:30 15 VII. Cash Flow Management
2:30 – 2:55 25 VIII. Budgeting
2:55 –3:05 15 IX. Where to put your money?
ACCOUNTING & FINANCE MANAGEMENT
TIME TOPICS
1:05 – 1:10 I. Introduction and Context Setting
1:10 – 1:15 II. Accounting vs. Bookkeeping
1:15 – 1:20 III. Basic Bookkeeping
1:20 – 2:00 IV. Financial Statements
A. Simple Income Statement
B. Simple Cash Flow
C. Balance Sheet
2:00 – 2:15 VI. Evaluating Investment Opportunities/Options
2:15 –2:30 VII. Cash Flow Management
2:30 – 2:55 VIII. Budgeting
2:55 –3:05 IX. Where to put your money?
ACCOUNTING & FINANCE MANAGEMENT
TIME TOPICS
1:05 – 1:10 I. Introduction and Context Setting
1:10 – 1:15 II. Accounting vs. Bookkeeping
1:15 – 1:20 III. Basic Bookkeeping
1:20 – 2:00 IV. Financial Statements
A. Simple Income Statement
B. Simple Cash Flow
C. Balance Sheet
2:00 – 2:15 VI. Evaluating Investment Opportunities/Options
2:15 –2:30 VII. Cash Flow Management
2:30 – 2:55 VIII. Budgeting
2:55 –3:05 IX Where to put your money?
II. ACCOUNTING VS. BOOKKEEPING
• ACCOUNTING
• Process of identifying, classifying, recording and
summarizing of business transactions in monetary
terms
• Interpreting and communicating the results to the
interested parties to enable them to make
decisions
• BOOKKEEPING
• Process of chronologically recording every business
transaction in book of accounts
ACCOUNTING & FINANCE MANAGEMENT
TIME TOPICS
1:05 – 1:10 I. Introduction and Expectation Setting
1:10 – 1:15 II. Accounting vs. Bookkeeping
1:15 – 1:20 III. Basic Bookkeeping
1:20 – 2:00 IV. Financial Statements
A. Simple Income Statement
B. Simple Cash Flow
C. Balance Sheet
2:00 – 2:15 VI. Evaluating Investment Opportunities/Options
2:15 –2:30 VII. Cash Flow Management
2:30 – 2:55 VIII. Budgeting
2:55 –3:05 IX Where to put your money?
III. BASIC BOOKKEEPING
Farmer’s Basic Book of Accounts
üCash Book
üDebtors and Creditors Ledger
üStock Register
üFixed Assets Register
üLoan Register
III. BASIC BOOKKEEPING
Cash Book: contains all cash receipts
and disbursements
Date Particulars Cash In Cash Out Balance
27/Oct 10 Cavans 210,000.00 210,000.00
(001234)
28/Oct Electric 2,000.00 208,000.00
(004321)
30/Oct Salary 8,000.00 200,000.00
(L1, D1)
III. BASIC BOOKKEEPING
Debtors and Creditor Ledger: contains
money owed to you by your customers
and money owed by you to your
suppliers
R & A Eatery
Date Particulars Amount Payment Balance
14/Oct 10 Cavans 210,000.00 60,000.00 150,000.00
(SI#001234)
29/Oct 50,000.00 100,000.00
 III. BASIC BOOKKEEPING
Stock Register: contains an inventory of all farm
materials, crop seeds, fertilizers, pesticides, fuel,
harvested crops, and other farm items; or in cases of
livestock, breeds, identifications/numberings, etc
Date Qty Particulars U/Price Date Bal Yield/Date
Used
6/14 5 pcks Anjan Hybrid Seed 1,000.00 6/30 0 140 cavans
(11/15)
5 bgs Complete fertilizer 1,000.00 2
5 bgs Urea 1000.00 1
50 kgs Muriate of potash 60.00 25kgs
2 kgs fungicide 1,000.00 1 kg
2 kgs insecticide 1,000.00 1 kg
2 ltr herbicide 1,000.00 1 ltr
 III. BASIC BOOKKEEPING
üFixed Assets Register: contains the list of all
the fixed assets a business owns. The purpose is to
keep track of book value of assets and
depreciation. It contains specifications, date of
purchase, cost, salvage value, depreciation rate

Date Particulars Amount Scrap Dep Dep

Value yrs Cost
5/Jan Motorcycle 60,000.00 6,000.00 4 6,000.00
5/Jan Shed 30,000.00 12,000.00 4 12,000.00
III. BASIC BOOKKEEPING
üLoan Register: contains object descriptions,
condition status and details of loan agreements
including dates of loans
Name Juana Lapira ID# 1456 Date 1/09/2020 DV# 12474
Loan Amount 60,000.00 Monthly Payment 2659.24
Interest rate 6% No. of Payments 24
Loan Period 2 years Total Interest 3,821.68
Start date of loan 01/09/2020 Total Cost of Loan 63,821.68
No. Payment Beginning Payment Principal Interest Ending
Date Balance Balance
1 1/10/2020 60,000.00 2659.24 2359.24 300.00 57,640.76
2 1/11/2020 57,640.76 2659.24 2371.03 288.20 55,269.73

III. BASIC BOOKKEEPING
BIR Required Manual Book of Accounts
üPurchases Book (Disbursement)
üSales Book (Cash Receipt)
üJournal Book
üGeneral Ledger
III. BASIC BOOKKEEPING

üCASH RECEIPT/SALES BOOK

JANUARY
DAY PARTICULARS AMOUNT
1 NO TRANSACTION
2 NO TRANSACTION

14 Payment from R&A 50,000.00

30 NO TRANSACTION
TOTAL 50,000.00
III. BASIC BOOKKEEPING
üPurchases Book (Disbursement)
III. BASIC BOOKKEEPING

üGENERAL LEDGER
2021
MONTH SALES DISBURSEMENTS
JANUARY
FEBRUARY
III. BASIC BOOKKEEPING
1. After recording all your purchases in the “Purchases
Book” and all your sales in the “Sales Book” get the
monthly total of it and record them in the “Journal
Book”.
2. Other non-operating transactions (additional
investment, bank loans, depreciation, etc. are also
recorded in the “Journal Book”.
3. Then, contents of the “Journal Book” are summarized
per account in the “General Ledger Book”.
III. BASIC BOOKKEEPING
v Maintaining a record of your CASH
RECEIPTS and DISBURSEMENTS makes
preparing tax returns easy
üDISBURSEMENTS are expenses that can
be deducted from the income for
purposes of payment of taxes
A. OPTIONAL STANDARD DEDUCTION (OSD)
• Individual – 40% of Gross Sales/Receipts
• Corporation – 40% of Gross Income
üOnce OSD is availed during the filing of 1st Quarter ITR,
it is already irrevocable during the taxable year.
üTPs not required to submit with the tax return such
financial statements otherwise required
III. BASIC BOOKKEEPING
B. ITEMIZED DEDUCTIONS
CRITERIA:
q relates to business
q supported by documents
q not contrary to law, public morals, policy and order
q reasonable amount: necessary and ordinary business
expense
III. BASIC BOOKKEEPING
B. ITEMIZED DEDUCTIONS - See BIR FORM 1701/1702 list
qAmortizations
qBad Debts
qCharitable Contributions (Note: Donations should be made
to BIR accredited donee institutions, otherwise individual
taxpayers can only claim 10% of the donation as deductible)
qCommunication, Light and Water
qDepreciation
qEntertainment, Amusement and Recreation (Note: Limited to
0.5% of net sales for sellers of goods or 1% of net revenue
for seller/provider of services.)
qFringe Benefits
 III. BASIC BOOKKEEPING
B. ITEMIZED DEDUCTIONS - See BIR FORM 1701/1702 list
qInterest (Note: The taxpayer’s allowable deduction for interest
expense shall be reduced by an amount equal to the 33% of
the interest income subjected to final tax. Moreover, all
interest incurred or paid to related parties cannot be claimed
as deductions to income)
qJanitorial and Messengerial Services
qLosses
qManagement and Consultancy Fee (Note: A portion of
expenses must be withheld and paid to BIR.)
qOffice Supplies
qProfessional Fees (Note: A portion of expenses must be
withheld and paid to BIR.)
qRental (Note: A portion of expenses must be withheld and
paid to BIR.)
III. BASIC BOOKKEEPING
B. ITEMIZED DEDUCTIONS - See BIR FORM 1701/1702 list
qRepairs and Maintenance-Labor
qRepairs and Maintenance-Materials/Supplies
qRepresentation and Entertainment
qResearch and Development
qRoyalties
qSalaries and Allowances
qSecurity Services
qSSS, GSIS, Philhealth, HDMF and Other Contributions
qTaxes and Licenses
qTolling Fees
qTraining and Seminars
qTransportation and Travel
qOthers (Case to case)
 III. BASIC BOOKKEEPING
RANGE OF TAXABLE INCOME TAX DUE = a + (b x c)
OVER NOT OVER BASIC AMOUNT ADD’L RATE OF EXCESS OVER
(a) (b) (c)
400,000.00 800,000.00 30,000.00 25% 400,000.00

vGRADUATED INCOME TAX RATE WITH OPTIONAL STANDARD DEDUCTION:

Income: 1,000,000 Actual Expenses: 20,000
Expenses as per OSD: 400,000
Taxable Income: 1,000,000 - 400,000 = 600,000
Tax Due: 30,000 + 25% (600,000 - 400,000) = 80,000
RANGE OF TAXABLE INCOME TAX DUE = a + (b x c)
OVER NOT OVER BASIC AMOUNT ADD’L RATE OF EXCESS OVER
(a) (b) (c)
800,000.00 2,000,000.00 130,000.00 30% 800,000.00

vGRADUATED INCOME TAX RATE WITH ITEMIZED DEDUCTION

Income: 1,000,000 Actual Expenses: 20,000
Taxable Income: 1,000,000 - 20,000 = 980,000
Tax Due: 130,000 + 30% (980,000 - 800,000) = 184,000
 III. BASIC BOOKKEEPING

v If your EXPENSES are more than 40% of your income, ITEMIZED

DEDUCTION is the more tax efficient choice.
v If your EXPENSES are less than or equal to 40% of your income,
OSD is the more tax efficient choice.

v REMEMBER: Whichever method you choose for your very

first quarterly filing for the year, that's the method you're
stuck with for the rest of the year. No more changing until
the next year
ACCOUNTING & FINANCE MANAGEMENT
TIME TOPICS
1:05 – 1:10 I. Introduction
1:10 – 1:15 II. Accounting vs. Bookkeeping
1:15 – 1:20 III. Basic Bookkeeping
1:20 – 2:00 IV. Financial Statement
A. Simple Income Statement
B. Simple Cash Flow
C. Balance Sheet
2:00 – 2:15 VI. Evaluating Investment Opportunities/Options
2:15 –2:30 VII. Cash Flow Management
2:30 – 2:55 VIII. Budgeting
2:55 –3:05 IX. Where to put your money?
IV. FINANCIAL STATEMENTS
- These are written records that convey the business
activities and the financial performance of a
company
- It include:
- Income Statement
- Cash Flow Statement
- Balance sheet
ACCOUNTING & FINANCE MANAGEMENT
TIME TOPICS
1:05 – 1:10 I. Introduction
1:10 – 1:15 II. Accounting vs. Bookkeeping
1:15 – 1:20 III. Basic Bookkeeping
1:20 – 2:00 IV. Financial Statement
A. Simple Income Statement
B. Simple Cash Flow
C. Balance Sheet
2:00 – 2:15 VI. Evaluating Investment Opportunities/Options
2:15 –2:30 VII. Cash Flow Management
2:30 – 2:55 VIII. Budgeting
2:55 –3:05 IX. Where to put your money?
IV. FINANCIAL STATEMENT
FACTS: Poultry Business
START UP:
1. Construction of Poultry House: P30,000.00
2. Bought Motorcycle with sidecar: P60,000.00
 2019 2020
IV.A. SIMPLIFIED
REVENUES
INCOME
Sales 419,220.00 466,374.00
STATEMENT
Less Cost of Sale 312,208.00 256,800.00
- PROFIT and LOSS
Gross Profit 107,012.00 209,574.00
statement
EXPENSES
- It focuses on the
Salaries and Wages 54,000.00 56,700.00
revenues and
Fuel and Oil 8,329.70 8,748.19
expenses during a
Taxes and Licenses 4,000.00 4,000.00
particular period.
Electricity 1,149.60 1,207.08
Once expenses are
Water 900.00 945.00
subtracted from
Depreciation 18,000.00 18,000.00
revenues the
Total Operating Expenses 86,379.30 89,598.27
statement
NET INCOME 20,632.70 119,975.74
produces the
company’s profit
figure called net
income
IV.A. SIMPLIFIED INCOME STATEMENT

2019
REVENUES
Sales 419,220.00
Cost of Sale
Opening inventory (1/1/2019) 200,000.00
Add purchases 150,000.00
Add feeds,vits 62,208.00
Less closing inventory 31/12/2019 100,000.00
Less Cost of Sale 312,208.00
Gross Profit 107,012.00
Add other operating revenue
Rent received 5,000.00
Commission received 40,000.00
TOTAL REVENUE 152,012.00
 IV. FINANCIAL STATEMENT
DEPRECIATION
ANNUAL PURCHASE PRICE - SCRAP
DEPRECIATION = USEFUL LIFE IN YEARS
START UP:
1. Construction of Poultry House: P30,000.00
2. Bought Motorcycle with sidecar: P60,000.00
POULTRY HOUSE MOTORCYCLE
=P30,000.00-P6,000.00 =P60,000.00-P12,000.00
4 YEARS 4 YEARS
=P 6,000.00 =P 12,000.00
 2019 2020
IV.A. SIMPLIFIED
REVENUES
INCOME
Sales 419,220.00 466,374.00
STATEMENT
Less Cost of Sale 312,208.00 256,800.00
- Shows changes in
Gross Profit 107,012.00 209,574.00
assets throughout
EXPENSES
the year
Salaries and Wages 54,000.00 56,700.00
- Reflects if a
Fuel and Oil 8,329.70 8,748.19
company is
Taxes and Licenses 4,000.00 4,000.00
operating with a
Electricity 1,149.60 1,207.08
surplus or deficit
Water 900.00 945.00
- Highlights areas of
Depreciation 18,000.00 18,000.00
concern
Total Operating Expenses 86,379.30 89,598.27
- This is typically
NET INCOME 20,632.70 119,975.74
required for loans
- Performance over
a given period
ACCOUNTING & FINANCE MANAGEMENT
TIME TOPICS
1:05 – 1:10 I. Introduction and Expectation Setting
1:10 – 1:15 II. Accounting vs. Bookkeeping
1:15 – 1:20 III. Basic Bookkeeping
1:20 – 2:00 IV. Financial Statement
A. Simple Income Statement
B. Simple Cash Flow
C. Balance Sheet
2:00 – 2:15 VI. Cash Flow Management
2:15 –2:30 VII. Evaluating Investment Opportunities/Options
2:30 – 2:55 VIII. Budgeting
2:55 –3:05 IX. Where to put your money?
 2019 2020
IV.B. SIMPLE Cash Flow from Operating Activities
CASH FLOW Net Income 20,632.70 119,975.74
Add: Depreciation 18,000.00 18,000.00
- Measures how Cash Provided in Operating Activities 38,632.70 137,975.74

well a company Cash Flow from Investing Activities

Construction of Poultry House (30,000.00) -
generated cash to
Purchase of Motorcycle (60,000.00) -
pay its debts, funds Cash Used in Investing Activities (90,000.00) -
its operating Cash Flow from Financing Activities:
expenses and fund Owner’s Capital 250,000.00 -
investments. Cash Provided by Financing Activities 250,000.00 -
Net Cash Inflow/(Outflow) 198,632.70 137,975.74
Add: Beginning Cash Balance - 198,632.70
Ending Cash Balance 198,632.70 336,608.44
Petty Cash Fund 5,000.00 5,000.00
Cash Balance 193,632.70 331,608.44
 2019 2020
IV.B. SIMPLIFIED REVENUES
CASH FLOW Sales 419,220.00 466,374.00
Less Cost of Sale 312,208.00 256,800.00
- The company was
Gross Profit 107,012.00 209,574.00
able to generate
EXPENSES
cash to funds its
Salaries and Wages 54,000.00 56,700.00
operating expenses
Fuel and Oil 8,329.70 8,748.19
and fund
Taxes and Licenses 4,000.00 4,000.00
investments.
Electricity 1,149.60 1,207.08
Water 900.00 945.00
Depreciation 18,000.00 18,000.00
Total Operating Expenses 86,379.30 89,598.27
NET INCOME 20,632.70 119,975.74
ACCOUNTING & FINANCE MANAGEMENT
TIME TOPICS
1:05 – 1:10 I. Introduction and Expectation Setting
1:10 – 1:15 II. Accounting vs. Bookkeeping
1:15 – 1:20 III. Basic Bookkeeping
1:20 – 2:00 IV. Financial Statement
A. Simple Income Statement
B. Simple Cash Flow
C. Balance Sheet
2:00 – 2:15 VI. Cash Flow Management
2:15 –2:30 VII. Evaluating Investment Opportunities/Options
2:30 – 2:55 VIII. Budgeting
2:55 –3:05 IX. Where to put your money?
 2019 2020
IV.C. ASSETS
BALANCE SHEET Current Assets
Cash 193,632.70 331,608.44
- OVERALL VALUE Petty Cash Fund 5,000.00 5,000.00

of your company Accounts Receivable - -

Total Current Assets 198,632.70 336,608.44
- Provides an
Non-current Asset
overview of assets, Poultry House 24,000.00 18,000.00
liabilities and Motorcycle 48,000.00 36,000.00
owner’s equity as a Total Non-current Assets 72,000.00 54,000.00
snapshot in time TOTAL ASSETS 270,632.70 390,608.44
- GENERALLY, LIABILITIES & CAPITAL

viewed at year end Liabilities

Accounts Payable - -
- Banks or
Total Liabilities - -
accountants may Capital
ask for this Owner’s Equity 270,632.70 390,608.44
document Total Capital 270,632.70 390,608.44
TOTAL LIABILITIES & CAPITAL 270,632.70 390,608.44
 2019 2020
IV.C. ASSETS
BALANCE SHEET Current Assets
Cash 193,632.70 331,608.44

ASSETS Petty Cash Fund 5,000.00 5,000.00

Total Current Assets 198,632.70 336,608.44
- Resources of the
Non-current Asset
company that are Poultry House 24,000.00 18,000.00
expected to Motorcycle 48,000.00 36,000.00
increase or cause Total Non-current Assets 72,000.00 54,000.00
future cash flow TOTAL ASSETS 270,632.70 390,608.44

(everything the
company owns)
IV.C.
BALANCE SHEET

LIABILITIES
- Obligations of the 2019 2020
company to LIABILITIES & CAPITAL
outsiders or claims Liabilities
against its assets by Accounts Payable - -

outsiders (debts of Total Liabilities - -

the company)
 2019 2020
IV.C. ASSETS
BALANCE SHEET Current Assets
Cash 193,632.70 331,608.44
OWNER’S EQUITY – Petty Cash Fund 5,000.00 5,000.00

the residual Total Current Assets 198,632.70 336,608.44

Non-current Asset
interest in or
Poultry House 24,000.00 18,000.00
remaining claims Motorcycle 48,000.00 36,000.00
against, the Total Non-current Assets 72,000.00 54,000.00
company’s assets TOTAL ASSETS 270,632.70 390,608.44
after deducting LIABILITIES & CAPITAL
liabilities (rights of Liabilities

the owner) Accounts Payable - -

Total Liabilities - -
Capital
Owner’s Equity 270,632.70 390,608.44
Total Capital 270,632.70 390,608.44
TOTAL LIABILITIES & CAPITAL 270,632.70 390,608.44
IV.C. BALANCE SHEET

• ASSETS = CAPITAL (Owner’s Equity or Resources supplied by the owner)

• ASSETS = CAPITAL (Owner’s Equity) + LIABILITIES

• OWNER’S EQUITY = ASSETS – LIABILITIES

• LIABILITIES = ASSETS – OWNER’S EQUITY

• CAPITAL EMPLOYED = OWNER’S EQUITY + LIABILITIES

• WORKING CAPITAL = CURRENT ASSETS – CURRENT LIABILITIES

ACCOUNTING & FINANCE MANAGEMENT
TIME TOPICS
1:05 – 1:10 I. Introduction and Expectation Setting
1:10 – 1:15 II. Accounting vs. Bookkeeping
1:15 – 1:20 III. Basic Bookkeeping
1:20 – 2:00 IV. Financial Statement
A. Simple Income Statement
B. Simple Cash Flow
C. Balance Sheet
2:00 – 2:15 VI. Evaluating Investment Opportunities/Options
2:15 –2:30 VII. Cash Flow Management
2:30 – 2:55 VIII. Budgeting
2:55 –3:05 IX Where to put your money?
VI. EVALUATING INVESTMENT OPPORTUNITIES

PAYBACK • It is the length of time required to

PERIOD recover the cost of investment.
• It is an important determinant whether
to undertake the project or not

Cost of Net Cash Balance Payback

Investment Flow
Year 1 250,000.00 38,637.30 211,367.30 1
Year 2 250,000.00 137,975.74 73,391.57 1
Year 3 250,000.00 145,269.82 .51
Payback Period 2.51
2yrs. & 6 mos.
VI. EVALUATING INVESTMENT OPPORTUNITIES
• It is a financial ratio used to calculate the benefit an
investor will receive in relation to their investment cost
RETURN ON
INVESTMENT • It is the most commonly measured as net income
divided by the original capital cost of the investment.
The higher the ratio, the greater the benefit earned.
• ROI = Net Income/Cost of investment (Total Asset)

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

Net income 20,632.70 119,975.74 127,269.82 133,722.91 141,840.56

Total Assets 270,632.70 330,620.57 454,243.35 584,739.71 722,521.45
7.6% 36.29% 28.02% 22.87% 19.63%
VI. EVALUATING INVESTMENT OPPORTUNITIES

• It is the percentage of revenue left after all

NET PROFIT expenses have been deducted from sales.
MARGIN
• The measurement reveals the amount of profit
that a business can extract from its total sales

FORMULA YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

Net income 20,632.70 119,975.74 127,269.82 133,722.91 141,840.56

Sales 419,220.00 466,374.00 489,912.00 513,450.00 539,454.00
4.9% 25.73% 25.98% 26.04% 26.29%
ACCOUNTING & FINANCE MANAGEMENT
TIME TOPICS
1:05 – 1:10 I. Introduction and Expectation Setting
1:10 – 1:15 II. Accounting vs. Bookkeeping
1:15 – 1:20 III. Basic Bookkeeping
1:20 – 2:00 IV. Financial Statement
A. Simple Income Statement
B. Simple Cash Flow
C. Balance Sheet
2:00 – 2:15 VI. Evaluating Investment Opportunities/Options
2:15 –2:30 VII. Cash Flow Management
2:30 – 2:55 VIII. Budgeting
2:55 –3:05 IX Where to put your money?
 VII. CASH FLOW MANAGEMENT
CASH Cash Flow from Operating Activities
2019 2020

- is the lifeblood of yur Net Income 20,632.70 119,975.74

business Add: Depreciation 18,000.00 18,000.00
CASH FLOW Cash Provided in Operating Activities 38,632.70 137,975.74
– It is the Cash Flow from Investing Activities
measurement of the Construction of Poultry House (30,000.00) -
amount of cash that Purchase of Motorcycle (60,000.00) -
comes into and out
of your business in a Cash Used in Investing Activities 90,000.00 -
particular period of Cash Flow from Financing Activities:
time Owner’s Capital 250,000.00 -
- Measures how well Cash Provided by Financing Activities 250,000.00 -
a company
generated cash to Net Cash Inflow/(Outflow) 198,632.70 137,975.74
pay its debts, funds its Add: Beginning Cash Balance - 198,632.70
operating expenses Ending Cash Balance 198,632.70 390,608.44
and fund
investments. Petty Cash Fund 5,000.00 5,000.00
Cash Balance 193,632.70 331,608.44
VII. CASH FLOW MANAGEMENT

Dealing with customers

ü Institute COD to ward off slow-paying customers.
ü Offer discounts to collect payments earlier.
ü Ask customers to make deposit payments at the time orders
are taken
Managing and handling accounting
ü Track accounts receivable to identify and avoid slow-paying
customers
ü Collect receivables immediately.
ü Maintain a cash reserve.
ü Get rid of old, outdated inventory for whatever you can get.
ü Extend payables where you can.
ü Spend only on essentials.
ü Be smart about hiring.
ü Make the best use of technology.
ACCOUNTING & FINANCE MANAGEMENT
TIME TOPICS
1:05 – 1:10 I. Introduction and Expectation Setting
1:10 – 1:15 II. Accounting vs. Bookkeeping
1:15 – 1:20 III. Basic Bookkeeping
1:20 – 2:00 IV. Financial Statement
A. Simple Income Statement
B. Simple Cash Flow
C. Balance Sheet
2:00 – 2:15 VI. Evaluating Investment Opportunities/Options
2:15 –2:30 VII. Cash Flow Management
2:30 – 2:55 VIII. Budgeting
2:55 –3:05 IX Where to put your money?
VIII. BUDGETING

• Budgeting (Spending Plan) is the

process of creating a plan to spend
your money.
• This allows you to determine in
advance whether you will have enough
money to do the things you need to do
or would like to do.
• Purpose: balance your expenses with
your income
 2019 2020 2021
REVENUES
VII. BUDGET
Sales 419,220.00 466,374.00 560,000.00
- When you create a Less Cost of 312,208.00 256,800.00 310,000.00
budget for your Sale
business, you plan to set Gross Profit 107,012.00 209,574.00 250,000.00
aside money for certain EXPENSES
costs, taking into
Salaries 54,000.00 56,700.00 56,700.00
account your income
and expenses. Fuel and Oil 8,329.70 8,748.19 9,000.00
- The budget you make Taxes/Licenses 4,000.00 4,000.00 5,000.00
may be based on info Electricity 1,149.60 1,207.08 1,300.00
from your financial Water 900.00 945.00 950.00
forecast, but it’s distinct
Depreciation 18,000.00 18,000.00 18,000.00
from the forecast itself.
Total Expenses 86,379.30 89,598.27 90,950.00
NET INCOME 20,632.70 119,975.74 159,050.00
VII. BUDGET 2020 2021
REVENUES
- When you create a budget for
your business, you plan to set Sales 466,374.00 560,000.00
aside money for certain costs, EXPENSES
taking into account your income Supplies 256,800.00 310,000.00
and expenses. - The budget you Salaries/Wages 56,700.00 56,700.00
make may be based on info
Fuel and Oil 8,748.19 9,000.00
from your financial forecast, but
it’s distinct from the forecast Taxes/ Licenses 4,000.00 5,000.00
itself. Electricity 1,207.08 1,300.00
Water 945.00 950.00
IMPROVEMENT PLANS (2021):
A. PROFESSIONAL SERVICE Depreciation 18,000.00 18,000.00
1. Accountant: 5,000.00 Total Expenses 89,598.27 90,950.00
B. PERSONNEL: NET INCOME 119,975.74 159,050.00
1. Assistant: 7,500/mo.
CAPITAL OUTLAY:
1. COMPUTER: 15,000.00
2. PRINTER: 5,000.00
3. CELLPHONE: 15,000.00
OFFICE SUPPLIES: 2,500.00
 VIII. BUDGETING

5 YEARS PROJECTION
2021 2022 2023 2024 2025
Gross
Sales
560,000.00 672,000.00 806,400.00 967,680.00 1,161,216.00
Gross
Expenses
400,000.00 480,000.00 576,000.00 691,200.00 829,440.00
Gross
Profit
160,000.00 192,000.00 230,400.00 276,480.00 331,776.00

Increase percentage 20% 20% 20% 20%

ACCOUNTING & FINANCE MANAGEMENT
TIME TOPICS
1:05 – 1:10 I. Introduction and Expectation Setting
1:10 – 1:15 II. Accounting vs. Bookkeeping
1:15 – 1:20 III. Basic Bookkeeping
1:20 – 2:00 IV. Financial Statement
A. Simple Income Statement
B. Simple Cash Flow
C. Balance Sheet
2:00 – 2:15 VI. Evaluating Investment Opportunities/Options
2:15 –2:30 VII. Cash Flow Management
2:30 – 2:55 VIII. Budgeting
2:55 –3:05 IX Where to put your money?
IX. WHERE TO PUT YOUR MONEY
1. Bank Deposits as Savings
2. Ordinary investments:
• Land
• Machinery
• Livestock
• Vehicle
• Inputs inventory

Advice:
1. DIVERSIFY into other financial tools to grow wealth
2. CONSULT and get some advice or good help.
3. PLAN and STICK to it.
IX. WHERE TO PUT YOUR MONEY

• High-Yielding Savings Account – a savings account that

requires higher initial deposit (and maintaining balance) but
with higher interest rate than ordinary savings account
• Time Deposit – higher deposit than ordinary savings deposit
but locked-in for a certain period of time (1 month, 3
months, 6 months, or 1 year)
• Stocks – UNITS OF OWNERSHIP IN A CORPORATION; you buy
individually at the Philippine Stocks Exchange and create
your investment porforlio on your own; yields high earnings
when you purchase stocks at a low market price an d then
sell them later at a higher price
• Money Market Funds – funds are invested in corporate
bonds, government treasury bills, and other risk-free, short
term securities; earns a little higher than time deposits
• Invest in equity UITFs (unit investment trust funds) – it is “like”
buying stock market; fund managers are the ones who
manage manage your pool of stocks.
IX. WHERE TO PUT YOUR MONEY

• Bonds – it is a debt security

• Treasury Bills – mature less than a year
• Treasury Bonds – mature longer up to 30 years
• Corporate Bonds – issued by public or private companies
• Municipal bonds – issued by local government units
• Government Bonds – issued by government-owned and
controlled corporations
• Real Estate – buying land, leasing land, condotel investing,
renting property, land partnership
• Life Investments – these investments ensure a much more
comfortable life for you and your loved ones
• Educational Fund
• Insurance
• Retirement Fund
KEYS FOR BECOMING
FINANCIALLY SUSTAINABLE
WHERE DO YOU PUT YOUR
MONEY?
 BREAK
(5 Minutes)
 BREAK AWAY SESSION
(15 MINUTES)

Atty. VERSELIE LIMOS

66
velimos107@gmail.com
1 Hour PRESENTATION
(12 Minutes Per Group)
 QUESTIONS

Atty. VERSELIE LIMOS

68
velimos107@gmail.com
THANK YOU!
Atty. Verselie E. Limos
0917-8101470
velimos107@gmail.com