Keeping up with business financials seems like a dreary task, a sure cure for insomnia or at least a drain on your valuable time. But, make no mistake, it is one of the vital things that every business owner needs to do. As Bill Gates said, “Know your numbers is a fundamental precept of business.” As you think about it, how can you really know your business if you don’t really know (and monitor) your numbers?
Reasons to Have Financials in Order
Your business financials provide the formally recorded objective data to describe the health of your business as found in the balance sheet, income statement, and cash flow statement:
- They are required by banks and other lending institutions as well as by the government, so they need to be correct and up to date.
- They communicate the state of the business to all stakeholders.
- They are essential to making good decisions, including how much is available to spend, when to spend, how to manage inventories, how to manage costs and manage margins.
- They help you avoid mistakes with expenses, loans, and invoices.
Benefits of Keeping Up with Business Financials
Your business financials can deliver the following beneficial information to guide effective actions. All financial data must be maintained accurately and referenced frequently to have the best impact.
- Where do you stand with revenues? Is your marketing working?
- What funds are available for major purchases? How will expenses impact future cash needs?
- How are your expenses performing? Do you need to cut costs or alter pricing?
- What you can do regarding personnel. Can you bring on added staff, increase benefits or reduce personnel costs?
- How are tracking against business goals? Are your growth objectives being achieved?
- How well are debts being managed?
- What actions are necessary to satisfy financial institutions and tax authorities?
Seek Expert Financial Assistance
Contact Affinity Capital Funding based in Benicia, CA for financial solutions to set up your business for success. We can develop expert loan options tailor-made to suit you.