“By failing to prepare, you are preparing to fail” ~ Benjamin Franklin
Reviewing Financial Reports Pay Dividends
Most healthy businesses have a good idea of what they can expect financially in the coming year. There will always be exceptions to the rule as some industries are unpredictable by nature, or simply because a business is too new to evaluate accurately. However, in general, it is wise to plan your business’ financial future. Running financial reports is one thing. Reviewing them and making meaningful decisions is quite another.
Setting goals and objectives
Understanding your business and setting goals for financial health can help you reach optimal performance. Analyzing your company’s financial statements on a regular basis is a good place to start. While looking back on previous figures alone will not solve your problems, it will highlight actual results, aiding you in future planning and allowing you to adjust accordingly when you see things starting to go off course. Do you know how to interpret your numbers?
“Prepare and prevent, don’t repair and repent” ~ Unknown
Financial Statements are a navigation chart
Financial statements are an after-the-fact glimpse of your business transactions. What they offer you is the ability to assess profit and loss and understand your cash flow. Once you have a clear of view of what those are, you will be better equipped to map out profit strategies and improved financial performance for the coming year. Having a clear vision of where you want to go has some real benefits.
The benefits of budgeting
- Having concrete goals and objectives can help foster an attitude of self-discipline when it comes to deadlines and spending
- Regularly analyzing your business helps you maintain control and easily adjust your road map
- Creating realistic plans based on financial statements makes achieving your goals much easier
- Having the ability to make strategic decisions quickly and confidently promotes peace of mind
It’s never too late to start or to recalibrate
Take a few minutes to evaluate the cost/benefit of mapping out your financial future. You may not feel that it will be beneficial to your business now, but you may change your mind later. If you feel that the time is right to invest in the health of your business, there are some things to consider. Stable, mature businesses with many years of financial consistency under their belt may not need to create a detailed budget. However, there may still be opportunity to analyze and maximize profitability. Unstable, fledgling businesses may need a little more help understanding their finances. Either way, The Art of Accounting can help you look beyond the numbers, toward the horizon of your future.
We offer custom reporting and financial analysis to help you understand the story that your numbers are telling.
- Balance Sheet = Is your business healthy and well?
- Income Statement = Are you making or losing money?
- Business Plans = Are you setting goals and measuring them?
- Sales Performance = What line of business is performing and why?
- Gross Margin & Net Margin = It’s not how much you sell it’s how much you keep
- Budget and variance review = Do you know what your numbers are saying?