Whatever the state of the economy, it is always advisable to closely monitor your business’ financial position and performance.
Can you answer these questions:
- If the performance of your falls below expectations, what impact it would have? How much margin do you have before underperforming would significantly affect the viability of your business?
- Do you have a business plan setting out your objectives and financial projections to help you attain them?
- Do you have capital available or borrowing facilities in place? Do you actually know what you may need?
- Could restructure the finances of your business to release capital that could be used more profitably in some other way?
- If you have business borrowing, are you getting the best deal? And is it structured in a way that maximises tax relief?
These are just a few of the questions you should be asking yourself. Carefully controlling and monitoring your business finances will help you to understand your business better, to identify peaks and troughs and to see why they occur. You will also gain the experience to plan for fluctuations and to help engineer your own peaks.
By regularly preparing business forecasts and monitoring performance, you’ll be able to spot at an early stage when you might need extra capital or finance. You’ll also find that lenders and investors are much more willing to listen to businesses that seek funding at the right time – rather than “panic borrowing” – with a business case based on reliable projections.
Modern systems make it easy for you to have the reports you need, in real time. You can integrate all your financial data into ongoing management reports – and bespoke systems can be set up at little or no upfront cost, with very affordable monthly subscriptions.
If you would like more information about financial health checks, preparing financial projections and monitoring performance against budget, please get in touch – I’d be delighted to hear from you.
- 01935 383 500
- 07984 914 514