General

If you don’t want to end up like Kwaku Frimpong by year’s end, managing your personal finances should be a top priority skill on your to-do list. Personal finance management is about understanding your financial situation, being financially disciplined and taking control of how money comes and goes in your life. An important angle on personal finance management is the path to an effective way to keep your intelligence above emotions while making finance-related decisions. It is equally important to note that personal finance is not about knowledge to control cash movement but a feeling that you are responsible for securing the financial future for you and your family. A people’s financial freedom is largely tied to their individual persons’ financial security. That is why I feel that understanding how to deploy simple skills of personal financial management should be key in discussions on Ghana and Africa’s poverty alleviation goals. Here are some tips that will help you become financially sound and secure. It is necessary to thoroughly observe and understand your spending habits and patterns. Different people have different traits and show varying behaviour with money. So, asking the following questions to yourself can be very helpful: Answering these questions will trigger your financial sense and give you an idea of whether you seriously need to consider overhauling your personal finance management habits. If you find there is a problem, the next tips can be helpful in regaining control of your financial life. Making a budget is a great way to control emotional expenses. It’s a great way to avoid emotional traps and ensure that your spending is controlled, expenses remain on track, and money is saved. Likewise, it can be an effective tool to make better financial decisions, crush prevailing debt, and achieve long term financial goals. However, it’s important to note that the budget only adds value when analysed with the planned approach. Financial mistakes made in one period mustn’t be made in subsequent periods. This makes making a budget the first step towards achieving financial discipline and serves as a building block for effective financial management. Tips to get the most from your personal financial budgeting process: There’s a saying that you don’t need pieces of finance but rather financial peace [I think I just made my first dad joke!]. Paying off debts is important for your financial health and emotional stability. One thing you need to do is ensure that your spending remains under your income. This simple adjustment helps you not enter into debt. However, if you have entered into debt, here are some tips that will help to get rid of it: An important thing to understand is that you need to get rid of debt yourself. It’s true that you’ll need some form of inspiration. However, inspiration comes with an action that motivates your mind to remain financially disciplined to achieve financial peace. Start repaying debts today and make a mind to live debt-free life at any cost! There are two types of assets in the world: depreciable and appreciable. Depreciable assets will always lead to a rise in your list of expenses. So, these should be minimized as much as possible. On the other hand, appreciable assets have the potential to enhance income and build further assets. So, these should be maximized. Let’s understand how appreciable and depreciable assets make a difference. Let’s say you have a car (depreciable asset). For each day you own the car, it gets old and decreases in value. So, it’s a depreciation expense for you. On the other hand, if you own land, its value is expected to increase with inflation and the increasing population. So, it can be a good idea to own appreciable assets rather than depreciable ones from a financial management perspective. Investment is not about being able to put millions and billions into gold, commodities, or financial instruments. Instead, it’s a name given to an attitude that needs to be developed from the very start. Often, people think only the rich and the affluent can invest. However, that’s a myth and not reality. The fact is, one single cedi you have can be invested to generate a return. I think saving money is good. I have nothing against saving. Nonetheless, let’s not mistake putting money in a savings account long-term as “investing”. From a basic mathematical standpoint, it’s not. The rate of inflation in Ghana is expected to be about 10.0% by the end of this quarter. Comparatively, the highest interest rate on a savings account now is around 5.5%, and that’s even on savings above ~GH¢500,000. Do simple subtraction and you’ll quickly realise that there’s effectively a loss of 4.5% (10.0%-5.5%) on that money in your long-term savings account. Do not depreciate the value of your money. If you want to save money long-term, put it into safe and secured investment opportunities, like Treasury Bills. Also, beware of the many Ponzi schemes that promise unrealistically high-interest rates. I asked the team at Maxwell Investments Group what managing personal finances mean to each of them. Our Director for Social Impact & ESG, Mr. Rya G. Kuewor, gave an interesting perspective on “savings”. “Optimising and managing one’s personal finances go all the way back to one’s future goals. Let’s work backwards on this and ask if our present savings lifestyles will create financial space for our future goals. Most of us these days know the colloquial rules of saving, or tithing, or setting aside, but we need to understand that if saving (cash) is not truly personal, I dare say even emotional, you’ll go month to month, and still emerge six pence none-the-richer!” And he’s absolutely right! We, therefore, need to find a personal or emotional reason to save and pay a non-negotiable tithe to ourselves but in a way safely tucked away in a secured set-up. The key here is to hold yourself passionately accountable for the future you. What should be done to achieve personal financial freedom in a nutshell? The science of

Traditional medicine, also known as ethnic, indigenous, alternative or complementary medicine, is the first and oldest healthcare system. It is the ancient and cultural means used by humans to deal with diseases. The practice is available and is found in almost every country around the world (Kenu et al., 2021). It is vast and diverse. According to the World Health Organization (W.H.O), Traditional medicine includes “diverse health practices, approaches, knowledge, and beliefs incorporating plant, animal, and or mineral-based medicines, spiritual therapies, manual techniques, and exercises applied singularly or in combination to maintain well-being, as well as to treat, diagnose or prevent illness.”(W.H.O, 2002) Traditional medicine practices denote health medicines and practices that are outside of mainstream conventional medicine. It encompasses a vast range of ancient and modern approaches, including the use of traditional herbs, traditional and spiritual healing to support the prevention, treatment and management of diseases. Studies have shown that Traditional medicine plays a critical role and makes significant contributions to the health care needs of not only those in developing countries but also in some developed countries (Hilbers & Lewis, 2013; Hussain & Malik, 2013). Reports of W.H.O. indicate that the interest in Traditional medicine and its usages, treatments or supplementary treatments of many illnesses are wide and rapidly growing around the world (Qi, Zhang 2013). Over the past few years, in developed countries, there has been an increase in the interest in the use of Traditional medicine, where it is referred to as complementary and alternative medicine. The report also indicates that about eighty percent (80%) of the population in developing countries, especially in Africa, rely on Traditional medicine as a source of primary health care. According to Kasilo & Trapsida (2010), in developing countries, it is the primary source of health care for the majority of the populace; because of its affordability, accessibility, and cultural acceptability. In Ghana, Traditional medicine has been practised for many centuries, even before the colonial era. As indicated by (Elujoba et al., 2005; Gyasi et al., 2017), the activities of missionaries, likewise colonization, resulted in the introduction of mainstream conventional medicine. The orthodox subsequently became recognized and institutionalized as the mainstream health care system in Ghana, resulting in repression of the traditional practices in Ghana to some extent. Moreover, the W.H.O. recognized and acknowledged Traditional medicine’s essence as it encourages its members to formulate policies, regulations, and programs and integrate them into the national health systems. As a member, Ghana recognizes Traditional medicine as an existing healthcare system; likewise, it has in place national policy but yet to fully integrate it into all the aspects of its national health care system (Gyasi et al., 2017). Ghana recognized that the majority of its populace, about 70% depend on Traditional medicine for their primary health care needs. This led to its introduction into the mainstream health care system in several hospitals in the country in 2011, following a policy of herbal medicine practice in 2005. This also subsequently led to the implementation of the W.H.O. strategy of integrating Traditional medicine into the formal healthcare delivery system in 2012 (Gyasi et al., 2017). According to (WHO, 2019) the integration has come to stay and gradually making progress, with about forty centres in the district and regional hospitals where Traditional medicine is being used side by side with conventional therapy. Furthermore, to integrate traditional medicine into the national health care system in Ghana, the Traditional Medicine Practice Council, as the lead institution on the subject matter, was established through the Traditional Medicine Practice Act, 2000 (No. 575), and mandated to promote, control, and regulate Traditional medicine practice in Ghana. Despite the process made so far, Traditional medicine still receives limited consideration from many professionals, especially medical experts demanding more scientific evidence of its safety, quality, and efficacy. There are concerns about the quality, safety, and negative perception of Traditional medicine in Ghana. Despite the importance and the essential role it plays in the health care needs of Ghanaians, there is a paucity of information about the current state of Traditional medicine practices in Ghana. As a result, I found it prudent to consult the body responsible for promoting, controlling and regulating Traditional medicine practices in Ghana, to attain and relay to you, the reader, insight into the current situation. I posed a series of questions to the Traditional Medicine Practice Council concerning the state of Traditional medicine practices in Ghana. Here’s what they had to say. — Answer: The TMPC is on course to ensure appropriate standards of practice among Traditional Medicine Practitioners (TMPs). Answer: The TMPC has registered over 1,000 Practitioners in 2021, it has trained different practice groups and it has controlled the influx of quacks and charlatans while promoting good traditional medicine practice. Answer: Ensuring Standards. Answer: Human Resources, logistical, and financial support. Answer: Extinction of raw plant materials due to low cultivation. Needed support from the State, research to find timely relevant remedies. Answer: Research, development and publicity, cultivation of medicinal plants.   Answer: Over 20,000 registration of Practitioners and premises in total. Answer: The TMPC provides support for graduates from KNUST to undergo a mandatory internship programme after which Professional Qualifying Examination and Interview is conducted to assess candidate’s eligibility for practice as Medical Herbalists. Answer: No. Answer: Very assuring, it is hoped that there shall be full integration, inclusion of medicines into NHIS and patronage will continue. — I hope you enjoyed the read. Hit me up and let’s keep the conversation going! I read all the feedback you send me. Also, feel free to throw at me topics you’d like to read or hear my thoughts on. You can always head to my Calendly to schedule a quick chat by going to calendly.com/maxwellampong. Or connect with me your way through my Linktree: https://linktr.ee/themax. These are all facts. And this has been an opinion piece. Have a blessed week! ♕ —- ♕ —- ♕ —- ♕ —- ♕ —- ♕ —- ♕ —- ♕ —- ♕ References Elujoba, A. A., Odeleye, O. M., & Ogunyemi, C. M. (2005). Traditional medicine development for medical and dental

What comes to your mind when you think about the financial performance of a business? Is it the profit/loss given at the last line of an income statement? Although that’s one of the strong measures to analyze the financial performance of the business, it does not offer a comprehensive perspective to base all of your decisions on that single metric. This is due to an inherent limitation of the profit/loss that comes with subjective assumptions, accounting estimates, and adequacy of the transaction-related controls. (wikiaccounting, 2021) Hence, there is a need to consider cash flow operations which are more objective and lead to enhanced accuracy of the decision making and financial analysis. But, the question arises of how to perform cash flow analysis with perspective to working capital management and how startups/businesses can control their cash flows to achieve higher profitability. How to perform cash flow analysis with perspective to working capital management Generally, cash flow is divided into three main categories: operating, financing, and investing activities. Operating activities are about how businesses manage their day-to-day operations. These operations consume working capital/financial resources. As we understand, interest/dividend is payable on raising debt/equity (financial resources). So, there is a cost associated with raising finance and using it as working capital. Hence, businesses tend to optimize their operations and streamline their processes so that the length of the working capital cycle decreases. Working capital cycle refers to a complete process of trade. It involves the length of time required to purchase, hold, and collect receivables from the customers. So, if the business has a shorter working capital cycle, it can complete the trade process in a shorter time to earn higher profit within the business’ working capital cycle and vice versa. So, a shorter working capital cycle is desirable from the perspective of financial analysis, achieved with the shorter production time, shorter inventory days, shorter receivable days, and higher payable days. It’s important to note that higher payable days is more desirable as it brings financing within the business without any cost (in most cases). It means there is a direct connection between the performance of operational business activities and the achievement of business profitability. If activities like sales, production, and collection are performed with higher efficiency, there are higher chances of profitability, and vice versa, generally speaking. So, if the working capital cycle is shorter, it leads to a lower cost of financing and higher business profitability. The next question arises how business can control cash operations/working capital to achieve higher profitability. How businesses can control cash operations/working capital cycle to achieve higher business profitability Control of cash operations require a disciplinary approach to plan, measure, monitor, and take corrective actions for the cash-related operations. The following actions can be helpful in the effective management of the cash-related functions/working capital. Measure your current cash runwayCash runway refers to the time your business is expected to sustain without a need to raise finance from external financing sources. It considers opening cash position, expected cash inflow and outflow of cash during a period under consideration (SRJ Chartered Accountants, n.d.). For instance, let’s say your opening cash amounts to $10,000, the expected inflow is $5,000 a month, and the expected outflow amounts to $6,000 a month. The given cash outline suggests more outflow of cash than inflow. Hence, opening cash needs to be able to support the shortage. However, opening cash is limited and expected to support the business to a specific period called cash runway. Cash runway in the given case can be calculated as follows. Cash shortage during a month =cash outflow – cash inflow Cash shortage during a month = $6,000– $5,000 Cash shortage during a month = $1,000 Cash runway = opening cash/cash shortage during a month Cash run ways = $10,000/$1,000 Cash run ways = 10 months The current cash runway is 10 months. This means, in the circumstances specified, the business can sustain itself for exactly ten months without raising finance from external sources (for working capital purposes). So, the strategic decision-making persons of the company must consider the length of the cash runway to adequately plan the cash needs of the business. Setting cash runway as a benchmark can be a helpful measure to control cash-related performance. A comprehensive evaluation of cash flow in terms of revenue and expensesIf your business has more expenses than revenue, it can be taken as an alarming sign; the situation is termed as ”burning cash”. So, there is a need to reduce the cash-burning rate that can be achieved with implementable smart moves to enhance revenue. For instance, finding a new market to sell an existing product, implementing smart marketing tools, and intelligent changes in the product design can lead to higher sales and increased revenue. Speed up recovery function for the accounts receivablesMaking profitable sales is not enough for the successful running of a business. The cash needs to be ultimately realized for successful operations. Otherwise, there may be actual losses behind the profit. For instance, if the business profit amounts to $2,000 and the expected bad debt to be recorded in future for the current period sales is $2,200. It means there is a net loss of $200. Hence, there is a need to ensure the efficiency of the collection; otherwise, an apparent profit might be a loss in reality. To increase the efficiency of the collection, the business needs to optimize the process of credit approval, formation of credit policy, invoicing, following up, and collecting the cash. Work to enhance gross profit (more relevant for manufacturing business)One of the ways to achieve higher gross profit is by increasing the price of the product. However, that might not be feasible in a competitive economic environment. So an alternate approach can be to control direct costs. The biggest secret of controlling direct cost lies in the fact that if there is a higher gross profit, the business has space to offer early payment discounts while maintaining net profitability. Hence, working