I think it is necessary to build an integrated financial and accounting system for ENS
This system should be able to perform the following tasks
Part 1 Financial Accounting
1.Preparing basic financial statements balance sheet, income statement (profit and loss) and cash flow statement
2.Organizing and building a chart of accounts for ENS
3.General ledger accounts
4.Organizing all accounts of external and internal parties dealing with ENS
5.Organizing revenue, expense and treasury accounts
6.Organizing accounts of fixed and current assets, short-term and long-term liabilities
7.Trial balance, accounts receivable and accounts payable.
8.Able to provide detailed, clear and simple reports about ENS activity for community for discussion, especially expense and revenue reports
9.Ability to build financial statements and the accounting system in accordance with international accounting standards
10.- ENS should building accounting system capable of dealing with different taxes, laws and financial regulations
11.Building cloud system to store all financial documents related to the transactions of ENS there is no accounting system without organized and preserved documents
that prove all financial transactions
12.Follow ENS dues and obligations and set a schedule for collection and payment
13.Developing and preparing financial regulations and laws that regulate and control any expenses or money paid from the ENS treasury (with the help and supervision of the ENS community)
Part 2 Forecasts and budgets
Always forecast begin by preparing revenue budget
prepare it based on expectations revenue or on planned goals
for example in current period we want to achieve greater revenues
based on realistic plan so you prepare budget including numbers we want to achieve
Based on this budget we prepares operating budget and rest of the budgets It may be fixed or flexible
Now we have the expected numbers
at the end of each period, we calculate the difference between expected and what actually happened and find the variance and analyze it and find out why it happened
for example
we in budget expected to spend 10000$ on a particular item but we spent virtually 11000$
what is the reason for spending 1000$ more than the mount in budget ??
It may be normal cause like price change and maybe for another reason should check and it’s all written in a report
accounting system periodically prepares a report showing variance between actual numbers and budget explaining reasons for it and discussing it with ENS community
these discussions improve way to prepare for the budget in following period
and in this way it achieves control from community and effectiveness in the optimal use of financial resources
It also helps in converting ENS plans into realistic financial plans and helps in proper planning and increasing confidence in the management of ENS
Capital budget
Developing a new product or adding parts to an existing product may be a complex matter that requires a lot of money, time and effort It is considered as an asset owned by ENS so it may need to build a capital prepare capital budget for it
Part 3 Financial analysis and financial models
Financial and accounting system should be able to vertical and horizontal financial analysis and extracting
1.Liquidity Ratios 2.Activity Ratios 3.Profitability Ratios 4.Leverage Ratios 5.Market Ratios
Able to build financial models that serve ENS goals
Analysis of financial ratios and horizontal and vertical comparisons of the statements and financial reports give a better idea of the strengths or weaknesses in ENS and
give ideas about possibilities of development and give the management better ideas
about the situation of ENS and how to move to forward
Also doing financial analysis of competitors for ENS (if possible do that) and comparing ratios of ENS with others in the same activity gives an idea of whether ENS performance is optimal or there are things that need correction
Financial analysis is very important and should be done regularly
Part 4 Cost accounting system and Opportunity Cost
ENS is ambitious company that is always striving to develop existing products and
in future maybe build new products
it also has a desire to expand and include new members of the team
All of this needs a strong costing system that regulates process of calculating
the costs of implementing ENS ideas
also be able to calculate the opportunity cost
For example we have a great idea it will cost 10000$
and will generate revenue of 15000$ should we implement it or not??
It depends on alternative opportunities perhaps there are other ideas that also cost 10000$ but revenues will enter 20000$ so this will be better than the first
ENS should have system for calculating opportunity cost helps in make decisions
Part 5 Accounting audit system
always check all numbers whether expenses and revenues with original documents and verifying correctness of all financial operations and integrity and make sure that there is no any manipulation, fraud, error or misuse of funds,either intentionally or unintentionally
and that any financial decision is the best and achieves interests of ENS and constantly stocking financial documents of ENS in a way that can be easily viewed at any time and to verify the validity of the declared financial statements
and immediately reveal any financial transaction that is suspected it be against the interest of the ENS community
Financial and accounting system should monitor the use of funds
Part 6 Managing treasury, financial resources, and token control
Financial and accounting system should develop plan for the optimal use of the ENS treasury and divide it in a way that achieves the maximum benefit for ENS and reduces financial risks to minimum
ENS financial resources should be managed only according to the will of the ENS community
Price of tokens is attempted to be controlled by raising or lowering it according to the financial plan and the goals to be achieved
Part 7 Financial Risks and Financial Opportunities
Financial and accounting system should constantly
write reports about potential financial risks and potential financial opportunities and develop plans to deal with both of them
and present to the community to think about best solutions
Also, if there is a financial shortage, makes plans to how cover this shortage
Part 8 Attracting more funding and investment
Financial system should make plans on how to attract more funding and investments to develop ENS
Provided that these plans do not affect the independence of ENS or create dangers or problems for ENS
The priority is for the independence of ENS and to be always safe
These are only broad lines and subject open to discussion
I hope that the community will interact to lay the foundation for building accounting and financial system that achieves transparency and integrity
and be able to prevent any financial risks from ENS and helps the management
in setting a development plan and increases confidence in management of ENS
so building an integrated accounting and financial system is important matter.
I hope the community will share its opinion in the comments
I hope in the end we can build the broad lines for the establishment of a financial and accounting system for ENS