When you plan a road trip or a hike, you need to know your starting point and your destination.
Knowing your destination is important, but that can change along the way. Wherever you are going, you MUST KNOW WHERE YOU ARE STARTING FROM to be able to assess your options for getting there.
In your business, YOUR STARTING POINT IS YOUR FINANCES.
It is always good practice to have your bookwork up to date and it is now more important than ever to know your position. You may need to do an overhaul of your accounts.
It is easy to accept the account codes your software automatically assigns to transactions in your bank feed; it is essential that you or your bookkeeper allots each transaction to the correct accounts so you can see where your money is going. Track your invoice payments received and bill payments made to flag any issues with tardy customers or with your own bill-paying processes.
NOW is the right time to implement new processes. You may need to introduce measures to ensure prompt payment from your customers. This will improve your cash flow so you can pay your own suppliers.
Do you have a system to ensure your bills are paid early or on time? If not, it will be difficult for you to take a SNAPSHOT OF YOUR POSITION at any time.
With single touch payroll, you should know where you stand with employee obligations. Are you keeping up with your superannuation payments?
Implementing processes to MANAGE YOUR CASHFLOW is a major step towards gaining control.
With your books complete and correct, you can look for the TRENDS IN YOUR BUSINESS and plan to build on them or change their direction.
Many bookkeeping software packages will do this for you. If you employ a bookkeeper, they will be able to provide the information to answer your questions. Remember that the quality of the answer depends on the quality of the question. You may prefer to engage with a consultant, accountant or business advisor to learn which questions to ask and how to manage the answers.
You will then have your starting point and an idea of how you are currently travelling. From here, you will be able to start your planning. Just as you will get a better result at the gym if a fitness professional advises you about a training program suited your individual needs, professional advice about ‘fitness’ tweaks for your business will allow you reach peak performance. The friendly and experienced team at AAA Finance and Consulting specialise in tailored solutions for individual businesses. Contact us today.