It is so important to know your business inside and out and one of the most important components you need to understand is your finances. If you don’t know the numbers of your business you won’t be able to understand how it has performed in the past and what your projections are for the future.
To be able to achieve financial stability, security and success it is vital to keep good records. Having good records will help you make informed decisions and track the results of these decisions. Keeping good records is most easily handled with a good accounting package. Xero is a great online accounting package that allows you to easily reconcile your bank using online bank feeds. However there are a number of good options to take control of your bookkeeping. Once you have completed your reconciliation you can run key reports to start getting to know your business a little better.
The basic reports you should be running on a regular basis include:
- · Profit & Loss Statements (Cash and Accrual)
- · Balance Sheet
- · Budget Variance reports
There are a number of extra reports that can be run to help you learn more about your businesses financial position, which include:
- · A Statement of cash flow
- · Aged Receivables (Debtors)
- · Aged Payables (Creditors)
When dating my wife the more time I spent with her the better I got to know her. Business is no different spend some time getting to know your business and start falling in love with the numbers.
Here are a few tips to guide you in the right direction.
- Analyse your financial position and tracking your performance against a budget will enable you to set and achieve goals.
- Know your outstanding debtors and creditors to help understand your future cash inflows and outflows.
- Construct a well thought out business plan with key financial goals that align with your non-financial goals.
- Build a habit of reconciling your bank regularly and running your key reports.
If you would like to get to know your business better, and start falling in love with the numbers. Call us today to discuss how we can help you understand your business better.