Business Finance and Data Transformation

Business Functions

• Technology is used for communication and information handling, referred to as ICT (information and communication technology).
• Office practice includes administrative staff duties, dress codes, filing, telephone etiquette, and internet usage.

Data and Information

• Data refers to raw, unprocessed facts (statistics, graphs, tables).
• Data is collected from different business functions.
• Data needs processing to become information.
• Information is processed data that provides knowledge for decision-making.
• Information can be stored manually or electronically (files, boxes, shelves, computers).
• Backups are crucial for stored information to avoid data loss, and businesses often use electronic storage devices (memory sticks, CDs).

Financial Function

• The financial function determines the necessary capital for the business.
• It identifies capital sources and allocates funds.
• The function ensures that the business earns enough to cover capital acquisition costs.
• Financial statements are prepared to present the business's financial health to banks and investors.

Sources of Financing

• Bank loans: borrowed money with interest, repaid over time, often secured by assets. Typically used for long-term financing.
• Bank overdrafts: short-term loan added to account, repaid with interest, often used by the entrepreneur.
• Asset-based loans: loans connected to assets that are used for expansion purposes
• Grants: government money given to developing businesses benefiting the community, which does not need to be paid back
• Receivable finance: loan given to businesses while waiting for payments of services rendered, to counter cash flow issues (to pay for outstanding invoices)
• Angel funding: wealthier entrepreneurs invest in other businesses, higher risk for the investor, typically used when a business starts up
• Venture capital: money provided by organizations to businesses in exchange for participation (e.g., a board position), often used for business start-up and expansion

Types of Capital

• Fixed capital: includes assets like land, buildings (pays for fixed assets). Used for long-term needs.
• Working capital: includes day-to-day activities, trading stock, raw materials, and short-term needs of the business.
• Owned capital: permanent capital provided by the owner, not repaid.
• Borrowed capital: temporary capital from financial institutions to be repaid, represents a liability.

Purchasing Function

• The purchasing function manages stock levels and ensures sufficient quantities for operations.
• The purchasing function maintains regular contact with suppliers, obtaining best possible terms and prices, and handling damaged goods.
• Purchases the right quantities for efficient business operations, buys goods from the best supplier who supplies at the right time and place, and ensures stock levels are appropriate.
• Determines product needs, obtains quotes, selects suitable suppliers, and places orders, ensuring goods are delivered on time. Records costs and prices, carefully determining the need for the product, Liase with the finance department to establish budgets and to determine required product/material/resource needs, obtaining goods/services at the right time and price.

Cash and Credit Payments

• Cash payments: payments made in cash or by cheque, usually enable businesses to manage expenses and budget appropriately.
• Credit payments: payments made through credit cards, or expected at a future date, allow for more flexibility but might lead to additional costs (e.g. interest).

National Credit Act (NCA)

• The Act provides clear guidelines for credit providers and applicants.
• Encourages responsible buying and consumer protection.
• Improves fairness and access to credit.
• Promotes compliance with financial transactions in South Africa.
• Ensures consumers are not exploited and that they have recourse via processes such as the Ombudsman or if the Consumer Tribunal or the National Consumer Commission (NCC) has been unable to resolve the issue.

Consumer Protection Act (CPA)

• The Act protects consumers from exploitation.
• It aims to enforce a culture of consumer rights.
• The Act sets standards for consumer rights and responsibilities.
• It guides and establishes protection for consumers related to sales, contracts, or transactions.
• Addresses issues regarding reckless granting or misbehaviour from credit institutions.
• Emphasizes ethical and fair business practices.

Public Relations

• Public relations builds brand image within and outside of the company.
• Activities include publicity, media releases, sponsorships, community involvement, and reports to maintain a positive image.
• Communicating with the public, including customers and potential customers.