Business finances are not the first thing you as a business owner would like to focus on. We understand that they can be complicated and difficult to understand.
But here’s the deal:
Your business finances are vitally important to the continual growth and success of your business as a whole.
In fact, understanding your financial position will help you better implement the right business strategy and measure success.
In this post, we outline the main reasons why you need to conduct a financial health check, especially now as the end of financial year is quickly approaching.
It allows you to review and redefine your financial goals
It’s easy to lose track of those goals you set at the beginning of the year.
A financial health check gives you the opportunity to review your short-term goals and determine how effective they were to achieving your long-term goals.
Find out what worked well and what didn’t work and use this to alter or come up with new goals.
It helps you build an effective business strategy
Business is constantly changing. As a business owner, you need to be in the game and aware of the changes going on in your market. Conducting a financial health check will help you analyse your business’s current state.
How does this help with your business strategy?
Firstly, you get an idea of your current financial position in the market, the factors that have impacted that over a certain period of time and the factors that will impact the market in the future.
With this information, you will have the ability to forecast future trends and use this to prepare a plan for your next steps.
You’ll find out where your cash is going
When you’re busy trying to keep your business running day-to-day, you may barely notice where your cash is going. You may not realise the areas where you’re spending too much.
What you may not notice on the day-to-day will be highlighted in your financial health check. You can use this information to pinpoint areas where you can cut down and in general, make more responsible financial decisions.
Ensure that your taxes are in order
Tax – another complicated area of business finance. Use a business health check to determine whether you are paying exactly what is required of you each year.
You can forecast for the future
Financial forecasting is important to the success of your business goals and your financial needs. With the information that a health check will provide you, you can predict upcoming expenses.
Better prediction of upcoming expenses leads to a better idea of how you can handle your key financial tasks.
How can you get started?
Conducting a health check yourself may be a little daunting. Getting the advice and expertise of a certified, experienced business advisor will help you tremendously.
Luckily, we have a team of highly experienced business advisors who can help you review your business and educate you in how your finance works.
Check out our bookkeeping and advisory services here.