Posted on 16/02/2016, 11:34
If you’re a business owner who thinks that the accounts or books are something you pay your accountant to look after and any involvement with them is a chore, you probably don’t look at them very often.
Perhaps just at year-end when you’re accountant prepares your CT600 submission for HMRC. If this really is you then you’re missing out on the valuable and actionable insight available through regular reviews of your accounts.
When you started your business, you most likely had some goals – you knew what you wanted to achieve financially, and these goals have probably evolved to some degree during the life of the business. As well as goals you should also have a business strategy and plan which shows how you are going to achieve them, and your plan should include objectives which are time bound and measurable. So there’s the rub; how can you tell how you are tracking against your financial objectives if you are not regularly reviewing your accounts? Sure, you can easily and quickly see how much cash you have in the bank (or how overdrawn you are) without looking at the accounts. But:
Here are a few quick tips to get you started, which assume that you already have goals, a strategy and a business plan with objectives.
Decide what financial indicators and ratios you need to track.
You will soon start to see the value in reviewing your accounts regularly.
In or last article, “Measuring What’s Important” we discussed key performance indicators or KPIs. There are lagging KPIs such as financial measures that tell you what just happened and leading KPIs that indicate what your financials are likely to look like.Read More
Following on from our previous blog in this series, “The Most Important Thing”, the next step is to translate your goals into action. For this, setting your targets and measuring your performance against them is vital to making them happen.Read More
What do you want to achieve in your business? Every owner manager had their reasons for why they started out on that journey – what are yours? And more importantly, are they still valid, are you on track, or are your hopes and desires being frustrated?Read More