By Abiola Ayankunbi
Resources are input which organizations use to realize strategic objectives. The resources are financial, physical, human and infrastructural in nature. Financial resources drive other resources. Financial resource is the processes of generating or acquiring funds, allocating it among different users’ units, effective utilization and control of it to realize intended strategic objectives. Financial resources management is therefore centred around resource marshalling, allocation, deployment and control. Much depends on the top management policy relating to resource planning.
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This piece is about the strategic and operational issues in the financial management function as it concerns media firms. Venture capital is viewed as a vital resource that is indispensable to the life of a media firm. This is so because cost of setting up a media firm is very expensive. Even, maintenance and running costs are on the high side especially if the media managers are interested in paying living wages and organizing periodic trainings for the staff members.
It is observed that there seems to be a deliberate attempt to shut door against hiring competent hands to manage financial aspect of the organization. There is a need to engage a professional who will manage the financial aspect of the business. His roles will include but not limited to raising funds for the organization whenever the firm is embarking on major activities, seeing that the firm has enough cash to meet its obligations in day to day activities, efficient allocation of funds so as to achieve the firm’s long run objectives and profit planning among others. Internal Auditor who should be reporting to the board is however missing in some media firms as chief accountant combines the two functions together. In some instances, the board is not even strong enough! Besides, the MD/E-i-C should have appreciable understanding of basic accounting terms so that he won’t be left in total darkness.
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The call for adequate funding of media companies has become necessary because poorly funded media firms always bring about poor productivity. This has not only resulted to poor output but become a source of discouragement to practitioners working in such companies. Consequences of inadequate funding and poorly remunerated workers include promoting corruption in the society as they would be tempted to explore alternatives means of surviving against ethics of the profession. The contents providers will do little reporting, less of rigorous fact-checking, near absence of editorial scrutiny and compromising the media crisis of legitimacy. The success and growth of a firm depends to a great extent on the quantity and quality of resources marshaled.
Availability of fund is one thing but its control means a lot. Fund control determines whether funds have been utilized for desired purposes and how effectively it has been utilized. It requires reviews and corrections. Financial resource programming requires determination of the amount & type of funds that will be required for each planning period, estimating how much of each type of funds can be expected to be available, determining how much of funds to generate, acquire or procure, planning of how additional funds can be generated, allocating funds among different users or departments through a budget, deploying funds to activity centres for effective utilization and determining ways of collecting credits and controlling financial resources.
The organisation’s structure must be water tight because organizational structure is the vehicle for the deployment of resources. Deployment involves the use of funds after allocation has been made. However, factors that may engender or endanger funds deployment include government policies, competitive conditions, market demand and technology.
It is a statement of fact that the stakeholders may not be able to provide all the needed funds required to sustain the business; this will lead to sourcing of funds. However, credit extension requirements should be built around character of the borrower, capacity to repay, capital of the borrower, collateral of debtor and conditions of business. The media managers must desist from presenting fictitious statement of account while sourcing for funds. This is so because some media firms are in the habit of having different types of Bank Statements, one for borrowing, one for payment of staff salaries, one for payment of taxes/obligations.
The financial situation is biting so hard to the extent that media practitioners are now soliciting for fund publicly! This is not good enough. Once their platforms are being sponsored or bankrolled by men of questionable characters, they will now become willing tools in the hands of corrupt public/government officials and fraudulent corporate institutions.
The essence of every business venture is to declare profit at the end of a fiscal period. Since business moves from the loss position, to break-even point and finally to profit status, media managers should be able to determine the total number of copy and space sales that will make different positions or status attainable. Risk control and ratio analysis for determining the financial health of a firm should be imbibed upon by the media managers.
Conclusively, financial resources needed for the running of the media firms should be released in bulk and not in a ‘piece-meal’. Borrowing to pay staff salaries should be discouraged completely. Media managers should ensure that when embarking on financial planning, the right resources are assigned to the right tasks.
Abiola Ayankunbi is MD/CEO at AbingMO3 Marketing Management Consultancy.
0802 305 1315.
abiolaayankunbi@yahoo.com.
