Department of Accounting Sciences, FEB UI:
The Role of Accounting, Tax and Finance in Running a Business
Hana Fajria – FEB UI Public Relations Officer
Depok, Saturday (27/6/2020) – The Department of Accounting Sciences at FEB UI held an online discussion entitled “The Role of Accounting, Tax and Finance in Running a Business.” The serious but fun discussion was attended by 34 lecturers from the accounting department.
The discussion featured Prodjo Sunarjanto, M.Ak., President Director of PT. Adi Sarana Armada Tbk (ASSA Rent) who is also an accounting lecturer at FEB UI as speaker and Dr. Ancella A. Hermawan, MBA., CA., ACMA., CGMA, the head of the accounting department as moderator.
Prodjo shared his experience from the time he joined ASSA, the company he now leads, and his knowledge in developing the company’s business. Following are the tips he shared: firstly, when starting a business, pick solid team whose members have different characteristics. Find young friends to form a cadre with good chemistry. The team needs a bulldozer, that is, someone who is aggressive, but also someone who is ready to step on the brake to anticipate failure. There must be a tax expert to make good tax plans to help manage the cash flow that benefits the company, not tax avoidance.
Secondly, a maximum debt to equity ratio of 4 times because a higher ratio means the interest expense is not subject to a deduction in taxable income. Thirdly, assets cannot continue to increase, so car auction is an ideal option to get rid of cars that are four years old. Fourthly, companies must have strategic plans (vision/mission/balanced scorecard for employee control),” he said.
For a business with a heavy asset-based character, depreciation is the biggest fixed cost, so it must be used to the maximum to ensure high utilization and cover interest expense because in Indonesia, the interest rate is very high. High fixed costs must be offset with high utilization/production because they are time sensitive. Like taximeters in taxis, even when business is stuck, companies still have to bear the fixed costs.
In addition, we must continue to look for business opportunities. See which way the wind blows before setting up a business. It does not necessarily mean reinveting the wheel. There are things that can be copied from other countries, and modified to suit local situations, such as Gojek and Grab that were inpsired by Uber. And build an ecosystem of the pillars of the business you enter.
Next, a business that is still in its infancy requires an authoritarian leadership, not a democratic leadership. Try to win the trust of the owner. Create small companies to develop or get new company leaders (seed leaders). Keep people on a profit-sharing scheme. We have to think about an exit strategy every time we build a business, develop a spirit of entrepreneurship, and finally find friends who are older/more successful, because they are more experienced so we can exchange ideas. “It is all about managing expectations. Accounting is just accountability, manage the company as if you own it, be humble, be adaptive, be responsive, be tough and be smart,” Prodjo concluded. (hjtp)
(lem)
