Identify and discuss the principle of basic financial management?

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1. Starting with a budget: Every business should begin with a detailed budget that outlines all income, expenses and short-term and long-term goals. This will help provide a baseline to measure progress against.

2. Developing financial controls: Establishing the right type of internal controls for finances can help ensure accurate reporting and responsible spending within the organization.

3. Maintaining adequate cash flow: Your business needs sufficient cash inflows to meet its daily operating expenses as well as investments in equipment, inventory, etc., which requires careful monitoring of accounts receivable and accounts payable.

4. Managing debt effectively: Anytime your business takes on new debt it’s important to assess both its ability to repay the loan or line of credit and impact on overall financial health before making a decision.

5. Setting financial goals: Before you make any decisions concerning money matters, set specific goals such as expanding product lines or achieving certain revenue targets in order to guide the process towards desired outcomes.