We wrote the article Primer: 5 Simple Steps for a Chance in Business Success
This is item number 2 in more detail, don’t forget to follow our social media pages to be able to get updated with the latest news, tips and articles from KDF Bookkeeping!
2. Do You Review Your Financial Situation Regularly?
Do you review your business financial statements regularly? You might say that you have done this annually, or you have your accountant do it for you, but we advise you to personally take a peek in there regularly.
Taking a look at your profit and loss statement, balance sheet and even your current cash flow, preferably every month is a key to your continued business success.
Goal Tracking
You must set business goals so you can try and reach something every time you review your finances. You will see if you are bringing enough revenue versus your expenses, is it increasing, decreasing or holding steady?
If you do this often, you will see a pattern in your business and do forecasts and see how busy you are and decide on the months that are a little more slower than the others by running promotions and other campaigns.
Issues and Transaction Tracking
You might include checking your bank and credit card statements to verify the transactions being done whether it was charged properly and detect any attempts of fraud. Some banks might have charged double, transaction processing issues and double-billings.
This will also allow you to keep on top of your account payables and receivables. You can immediately collect and follow-up customers and send out invoices in a timely manner. This will be less of an effort for your collections department in case you forgot to charge or invoice someone before the year ends.
Forgetting your own invoices may mean that you might be charged for late payment fees, bad credit record, so it is always best to keep tracking as much as you can.
Tax Plan
You can employ the help of your bookkeeper on your tax planning, but it would be heaps easier when you do the suggestions we outlined above. You can make changes to your business tax strategy so that you owe less when it’s time for tax filing.
Think of reviewing your Financial Situation as a lifeline to your business. It’s like monitoring how much oxygen you’re taking in to breathe and live, ignoring these will be detrimental to your business health.
Watch out for our 3rd article of the series about: Keeping Up with the Trends