Know Your Numbers!
By Toni-Ann Myrie – Content Development Intern | December 21, 2018
A look at the balances of your various accounts convey all one needs to know about your business. Are you positioned for growth? Can your bottom line be improved? What exactly is eating out your profits? Are your customers taking too long to pay?
Bookkeeping
Before you even try to know your numbers, there must be numbers for you to know. Bookkeeping is the area of accounting that ensures that you have the numbers that reflect the state of your business. It involves recording all the financial transactions conducted in your business.
Failure to do accurate bookkeeping can break your business. Proper bookkeeping is the deciding factor in whether you obtain the capital needed to fund expansion and growth. As such, you should ensure that you have accurate and timely records. Once the bookkeeping side of accounting is done, you are presented with the numbers you need to measure just how well your business is performing.
Financial Reports
At the end of your company’s financial period, accountants will use the numbers from your bookkeeping records to prepare your financial statements. The financial statements will help management and external stakeholders to get a clear idea of the financial position of the business. Inaccurate bookkeeping will understate or overstate the position of the business.
Any business strategies developed using these financial statements will not be effective in helping you to reach your growth targets. Do you see just how important it is to know your numbers?
Cash Flow Management
How is it that the financial statements reflect that you are making a profit but when the bill collectors come knocking you are unable to find money to pay them? One, well two words, Cash Flow.
To be able to pay your bills when they become due and achieve growth, one of the most important factors is to know how your money is coming into and going out of your business. The business may be making a profit however your cash flow statement may point out that most of your cash is tied up in stocks or you are yet to receive payment from your debtors/customers.
It is of utmost importance that a competent accountant works with you to identify your business’ key performance indicators and areas through which money is being leaked out of your business. Identifying these weak areas should be followed up with developing business strategies to stop leakages and increase cash flow.
The success of your business will depend on just how well you plan and implement these strategies.
Health Check Services
You know your numbers, but do you know that your numbers could be better? An accounting expert can examine your business to ensure that it is in good financial health. The accountant will probe for blockages that hinder the flow of money into the business, dissect all departments to see if they are operating smoothly and contributing to the company’s good health. The expert will ascertain that all parts of the business are working together to achieve its core functions. If one department is unhealthy, this affects the productivity of the business and your numbers. To realize growth, all departments must be in working order.
Tax Advisory
Yes tax. No one likes to hear the word tax but filing taxes is something that must be done. Once your bookkeeping has been done properly, your financial statements are a true and fair representation of the business and there is money in the bank,, the tax part of accounting will be relatively easy. All you or your accountant now have to do is to follow the tax laws to calculate your taxes and file taxes on time.
If you want to grow and scale your business, you must pay keen attention to your numbers, money management and your financial health. Proper accounting is the only thing that will give a precise description of your financial health.
Partner with Elizabeth Sloane if you want to prepare for growth, implement growth strategies and to see your growth aspirations become a reality. We will do your bookkeeping, financial statements, cash flow management, health check and taxes for you.
When envisioning business growth, think about your numbers, think about a firm that knows how to get results and offers the best accounting management services in the Caribbean, think about Elizabeth Sloane & Company.