Week 10 Reading Reflection

Week 10 Reading Reflection

Chapter 11 – Financial Preparation for Entrepreneurial Ventures

1.       Surprise – I found this reading interesting because I am currently taking Financial Accounting and am very familiar with many of the topics. Though I have been learning these topics for the past three months, I still find it incredible that this complex system was developed so perfectly. Somehow, the accounting equation always balances perfectly, and the system is very seldom flawed.

2.       Confusing – When talking about accounts receivables, I found it crazy that business often let so many accounts go unpaid for such a length of time. If a business isn’t receiving cash right away, how is it supposed to run efficiently? I was able to find a portion of my confusion to be answered by the “in practice” segment on page 318. This page offered great advice for businesses suffering from this issue. It was recommended to develop a process, make some noise, demand to get paid up front, find an advocate, and know when to walk away. I thought the last point was very interesting – at times, it can be too expensive to track people down and better to just let the debts go unpaid. For me, that seems incredibly tough because I have such a strong desire to profit. However, it is smart if trying to get that money back is unlikely, expensive, and time consuming.

3.       Questions – One topic that I have not learned very much about yet is the cash flow statement. The general concept is clear to me, but I would want to ask Kuratko, “How often does the average company make or use a statement of cash flows?” I am also not very familiar with the types of financial budgets. I would like to ask Kuratko, “Which financial budget method is found most popular by general businesses?” “Is there a method that you have personally used before or recommend?”

4.       Incorrect – There wasn’t really anything in this reading that stood out to me as being incorrect. I have been studying some of these topics over the duration of this semester and know that many of them follow the rules. There is no gray area when it comes to accounting; there is a black and white rule for everything. Kuratko gave a good overview of handling the financials of an entrepreneurial venture.