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Editor's letter.

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Vincent

What makes the difference between a company that succeeds and one that fails? As the Nasdaq crumbles, and insolvency specialists report a record number of companies going under, this question is becoming ever more important. In some cases it's a simple case of good idea, bad planning. In others, it's a lack of understanding of the market, or of the competition. In the retail sector, this is particularly vital -- as Marks and Spencer has learnt to its cost.

Often, the key is financial management and control. Project revenues too high and fail to manage costs properly, and a negative cash-flow will soon lead to disaster. The Dome suffered this fate, as did many of the dotcoms that floundered. Anyone running a small business knows that cash flow is crucial -- so why did so many dotcom executives learn this too late? Huge overheads and ambitious marketing spends cannot be sustained when revenues fail to materialise and, while venture capital may have been easy to come by at first, investors soon backed off(page 22).

But managing costs is just a small part of the financial manager's remit. Meeting shareholder expectations, wooing the City, keeping employees motivated with pay strategies that align remuneration with strategy, and integrating business operations and systems are all issues that keep finance directors up at night. Get it right and you have happy investors, happy management and an up-beat balance sheet. Get it wrong and things start to crumble.

The CIMA Business Management Event, a major...

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