workshop kewirausahaan ia if - finance
DESCRIPTION
"Keuangan dalam Bisnis" Materi Finance by Muhammad Fajrin Rasyid - Suitmedia. Slide presentasi Workshop Kewirausahaan IA IF. Additional files can be downloaded at http://sdrv.ms/X3Kt2STRANSCRIPT
Keuangan dalam BisnisPresented for Sekolah Kewirausahaan IA IFby Muhamad Fajrin Rasyid23 March, 2013
Outline
Business Driver
Financial Statement - Snapshot vs. Time period
Invoicing
Tax
Managing Cash Flow
Getting Fund
Business Driver
Profit
Revenue
Number of
transaction
Basket size
Cost
Marketing cost
SalaryExample: Basic business driver for e-commerce
Business Driver (Cont’d)
Profit
Revenue
Number of download
Application price
Cost
Fixed cost (Rent fee
etc.)Variable
cost (Salary)Example: Basic business driver for
mobile application developer
What’s driver for your business?
Understand the driver for your business will help you better sense your business financial
condition and how to improve it
For example...
How to increase revenue of e-commerce?Either increase number of transaction, or increase basket size (or both!)
If we go deeper, how to increase number of transaction in your website?
Either increase number of website visitors, or increase conversion rate, i.e. % of people buying compare to all visitors (or both!)
And so on
Business
Driver
• Get better sense of your business? Cool!
Business
situation
• Now, can you explain current (as in today) condition of your business?
What’s after business driver?
Financial Statement - Snapshot vs. Time
periodIf we talk
about snapshot situation (e.g. as in 1 January 2013), we talk about Balance Sheet
If we talk about
situation during time
period (e.g.
during 2012), we talk about
Income Statement
Elements of Balance Sheet and Income
StatementBalance Sheet Income Statement
AssetLiabilityEquity
RevenueExpense
Any financial event will belong to any two of these buckets
(can be in the same buckets)
For example...
Secure a 100 million project revenue is increased by 100 million (in terms of project revenue), asset is increased by 100 million (in terms of account receivable)
First invoice of the project (30%) paid asset is increased by 30 million (bank account), asset is decreased by 30 million (account receivable)
Borrow 50 million from bank asset is increased by 50 million (bank account), liability is increased by 50 million (account payable)
Still example...
Pay 25 million for salary expense is realized by 25 million (salary cost), asset is decreased by 25 million (bank account)
Buy new desk for 2 million asset is increased by 2 million (fixtures), asset is decreased by 2 million (bank account)
New shareholder decided to put additional capital 50 million asset is increased by 50 million (bank account), capital is increased by 50 million
And so on
Categorization
Purely based on your business driver
E.g. in Suitmedia, revenue is categorized into
Web based project revenue
Mobile app based project revenue
Mobile app based product revenue
Social media based project revenue
Fee based revenue
Other revenue
Invoicing
Some tips on invoicing (1)
Many companies have 20-30 workdays policy regarding the payment -- always prepare for additional 20-30 workdays
This works for many mobile related products as well (i.e. Apple App Store, Google Play Store, BlackBerry World, Amazon Appstore)
Some companies require additional documents (e.g. purchase order, report, etc.) -- make sure to complete these
Always ask confirmation before we send the invoice, otherwise if it is not accepted yet it will cause problems in the future
Some tips on invoicing (2)
Carefully state payment policy in your agreement (perhaps in legal session will be addressed more), e.g.:
For project type For retainer type
• Invoice 1 (30%) is sent directly when the agreement is signed by both parties
• Invoice 2 (50%) is sent after the project phase xxx is completed, proven by project report
• Invoice 3 (20%) is sent after the project is completed, proven by UAT and project completion report
• Invoice to sent monthly at the first week of each month, along with activity report for the previous month
Tax
First thing first
Always good if you
have tax consultant,
especially since
regulation often
change
Four common taxes related with startup
PPN
PPh pasal
21
PPh pasal
23
PPh pasal 25/29
PPN (VAT)
Amount: 10% of gross value
When: Every month, related with invoice (regarding project or others) issued in that month
Hence, don’t issue invoice when client is not ready, as we will need to pay VAT even if we haven’t received the payment
VAT is burdened only by last party in value chain
1
VAT illustration1
ClientYour
companyVendor
Project value IDR 50 Mn
Some scope is
outsourced for IDR 20
MnIn this case, you send invoice of IDR 55 Mn (IDR 50 Mn + 5 Mn for VAT) to client
Vendor will send invoice of IDR 22 Mn (IDR 20 Mn + 2 Mn for VAT) to you
Thus, VAT that you have to pay is 5 Mn - 2 Mn = 3 Mn
Surprisingly...
This apply not only to project related expenses, but to all of your expenses
Suppose that in that particular month, you buy IDR 22 Mn laptop... if you use your company name, you can actually deduct your VAT (in this case, IDR 2 Mn)!
Therefore, using the example, VAT that you have to pay in that month is IDR 3 Mn - IDR 2 Mn = IDR 1 Mn
1
PPh pasal 21 (for employees)
Amount: 5% if (annual salary - non taxable income) <= IDR 50 Mn
15% if (annual salary - non taxable income) between IDR 50 Mn and IDR 250 Mn
25% if (annual salary - non taxable income) between IDR 250 Mn and IDR 500 Mn
30% if (annual salary - non taxable income) > 500 Mn
Example: Employee with IDR 6 Mn salary per month, how much tax regarding this (assuming non taxable income IDR 15 Mn, and no THR & bonus)?
Taxable income = 6 Mn x 12 - 15 Mn = 57 Mn. Thus, their tax is (5% * 50 Mn + 15 % * 7 Mn) = IDR 3.55 Mn
When: Every month and every year (for the remaining)
2
PPh pasal 23 (for company)
Amount: 2% of gross value
When: Every time invoice is paid (done by the client)
Hence, the correct one regarding invoice payment is, if the project value is IDR 50 Mn, we send the invoice of IDR 55 Mn, but what we will get is IDR 54 Mn
How will this appear in financial statement?Cash is increased by IDR 54 Mn
Nothing change in revenue (assuming project is realized beforehand)
Account receivables is decreased IDR 50 Mn (assuming project is realized beforehand)
Tax payable is increased by IDR 5 Mn (for VAT)
Tax is realized by IDR 1 Mn (for PPh pasal 23)
3
Change regarding invoice payment
Cash is increased by IDR 54 Mn
Nothing change in revenue (assuming project is realized beforehand)
Account receivables is decreased by IDR 50 Mn (assuming project is realized beforehand)
For VAT, tax payable is increased by IDR 5 Mn OR tax receivables is decreased by IDR 5 Mn
For PPh pasal 23, tax expense is realized by IDR 1 Mn
For PPh pasal 23, tax payable is decreased by IDR 1 Mn
3
PPh pasal 25/29 (for company)
Amount: 25% of profit if revenue is >= IDR 50 Bn
12.5% of profit if revenue is <= IDR 4.8 Bn
Weighted average for in between
Example: A company having revenue of IDR 6 Bn and profit of IDR 1 Bn. How much taxes they have to pay? [12.5% x (4.8 Bn / 6 Bn) x 1 Bn] + [25% x ((6 Bn - 4.8 Bn) / 6 Bn) x 1 Bn] = 100 Mn + 50 Mn = 150 Mn
When: Every month and every year (for the remaining)
Note: Profit equals revenue minus any expense (including other taxes)
4
Exercise
Cash flow
Sales is vanity...
....profit is sanity...
....but cash flow is
reality
Some tips on cash flow
Ideal amount on working capital equals 3-6 months expense
Budget your expense as close as possible to reality, then project cash-in to cover that expense
Working backward (e.g. if I need to get IDR 50 Mn on June, then I need to send invoice on April, then I need to finish this project by March)
What if expense is still bigger? Then you need to cut your expense... or get funding!
Why do we need fund?
This lowest deficit is the fund we need to operate the
business
Where to get partner for funding?
Personal (Bootstrapping)
3F (Friend, Family, Fool)
Bank
Angel Investor
Yet remember, there is no angel!
Even when they said that they didn’t really care whether they
can get their money back or not, you have to always keep in
mind that you have obligation to return it
How to attract funding partner?
Ideas are cheap, unless they are executed
Investors need to be convinced that plans can actually work
Who are your customers? Will customers really use your product/service?What is the risk? How are you going to tackle that?Why we need to invest in you instead of your competitors?
Bank loan vs Investor
Get loan from bank if...
Get invested if...
• You just need cash, no need for anything else
• Your projected revenue (and hence, profit) is more certain
• Unlike for you to share ownership
• You need other things which investor can provide (e.g. expertise, network, access to market)
• Your projected revenue is less certain
• Investor is committed
How to value the business?
There is no exact
calculation. It is
combination of art
and science
Also depends on your business objective
Some end goals
IPO
Sell to other partiesKeep private
First method: PER
Price Earning Ratio (PER) is ratio of price compared to earning/profit of the company
e.g. Microsoft PER is around 15, so if its profit is USD 15 Bn, to acquire Microsoft we need USD 225 Bn
Facebook PER is 1700
Higher PER means the company is perceived to have higher profit in the future
How to use PER to value our company
Look around!
Especially company
in same industry or
in same location --
use as benchmark
However, don’t use only PER
How is your profit is close to zero or negative? If we use only PER then your company is worthless
PER usually works if the company is quite stable already and look for growths
Second method: Cost
Project your next 12-18
months expense
Trade that for minority stake in your
company
You shouldn’t accept fund if it is just for less than 6 months
expense
Again, no exact calculation
Open to any discussion (with NDA if needed)
Consider intangible benefits to your business brought by investors
Also consider your business objectives (e.g. if you want to go IPO, best not to give big stakes to each funding as many funding will be required)
Example in Bukalapak case
Suitmedia
Bukalapak
GREEBatavia
Incubator
Questions?
Can also be addressed to:Muhamad Fajrin RasyidSuitmediaGrha Prawira Lantai 2, Jalan Mampang Prapatan Raya Nomor 18 Jakarta [email protected]