Managing your business money can be a challenge . . . where to start, what to do, how to properly maintain everything.
You should carefully read and consider the following so you may have the 4 Keys to Financial Success in Your Business.
Financial Element #1: Having a Good, Reliable Bookkeeping System
→ Do you honestly understand what bookkeeping is for and what is considered the standard for a good system? Make sure you have a basic understanding of the process. Actively seek to educate yourself about the process that you need to know.
→ Do you have a workable bookkeeping system in place? If not, you could be jeopardizing the progress and stability of your business.
→ Is the person handling your bookkeeping doing so on a regular and consistent basis? Is this person qualified to handle this for you?
→ If you perform your business bookkeeping – do you need extra training or help with improving your system?
→ Is your business bookkeeping recorded in a timely manner?
→ Are you paying close attention to accuracy with your business bookkeeping?
Financial Element #2: Having Access to Quality Financial Reporting
→ Be sure that you are able to generate financial statements either from your bookkeeping/accounting software or create them from spreadsheets or manual records.
→ If you are performing your own bookkeeping, obtain training about how to create financial statements for your business.
→ Empower yourself as a business owner with the ability to understand your business financials. Do whatever it takes to get proper financial reporting in place. Do what is necessary to make this a reality, including seeking professional guidance.
→ Take a building block approach – don’t learn too much, too soon or it will overwhelm you. Do you have a step-by-step action plan?
→ Don’t make the mistake of only relying on outside advisers for learning about understanding your business finances – learn what you need to and take control.
Financial Element #3: Have Scheduled Periodic Financial Reviews
→ Understand that financial matters are your friend, not your foe. They possess the information that you need to become a successful business person as everything is tied to the money. How close are you to being at this point in your business?
→ Establish a time to review your financials. Schedule it and commit to it. If you don’t know how – find out.
→ If you are using bookkeeping/accounting software, print the financial statements every month and start reviewing them. Again, if you don’t know how to – find out.
→ Seek professional guidance. It is often debated as to whether all businesses need professional guidance. The only advice here is that it truly depends on the experience of business owner(s).
→ Keep it simple. Although this process can become very complicated, try to keep it simple. The reason is that increased complexity does not automatically mean the quality of the financial reporting is better. Also there are no advantages to creating and maintaining a financial reporting system that is so costly and lengthy that it outweighs it benefits.
Financial Element #4: Learn About Your Business Money Management Basics
These can include:
→ understanding your company balance sheet
→ understanding and interpreting your company income statement
→ knowing the significance of your company’s gross margin
→ learning how to manage your cash flows
→ calculating basic business ratios for your business
If you need help with any of the above, you may wish to consider engaging our assistance – Access Here