Posted by Sam Polimeni
Your numbers are trying to tell you something. When was the last time you had a good look at your numbers? Was it when you had a meeting with your Accountant last year, was it when you had to get your numbers ready to give to your bank, or when you sat down with your book keeper last month?
Your financials are vital to get you bank finance, and they are vital to keep you out of trouble with the tax office. But the most important aspect of financial statements(Profit & Loss Statement and Balance Sheet) is to give you better management information to run a better business. Your numbers are telling you which products are making you money, which services are profitable, which customers are profitable and which customers are eating up all your cash. They can tell you which assets are being utilized, they can tell you what your break even is, and even how many sales you need to make to hit your target profit..
The better you know your numbers the better decisions you will make, the better questions you ask, the better answers you will have..so why don’t you know your numbers better? Every financial decision you make in business is based on numbers, can you afford that new machine, new loan, new employee, how much cash flow will you need to grow your business this year?
All these answers and more can be found in your numbers, don’t set up your vital information to make it easy to do your quarterly BAS and end of year financials, set them up to give you the information to run a better and more profitable business.
