Do your numbers have a clean bill of health?
2019 was a tricky year for many. Our sense of the economy is that business has been slower than usual, general uncertainty has left people feeling afraid to make long term decisions to commit to new contracts. We've seen several businesses struggling with late payments from their customers which coupled with their own tight cash flow, and in some cases overdrafts and borrowing, has inevitably resulted in many business owners feeling financial pressure.
Have you ever taken the time to sit down and really review where you are with your finances?
From three years of running But the Books, I know that one of the things people find most difficult is staring at a page of numbers and making sense of them. But it's important to make sense of them if you're going to be prepared for whatever's around the corner. So where do you start when giving your finances a health check? My suggestion is to ask some questions around your income, expenditure and your cash flow.
What's your sales target? And are you hitting it each month? Is it realistic? If you're not hitting it, why not? If you're exceeding it, is that sustainable? Do you need to increase your target for future months? Who are your main customers? Are you heavily dependent on one or two and what would you do if they went out of business? What are your most popular services or products? Are you charging enough for them? And what can you do to make sure you focus the most time and energy on your best performing products and services?
How do your costs compare to your budget and why are there variances? What are your biggest costs? Are these costs necessary? Is there a way to reduce them, perhaps negotiating deals with your suppliers or buying from other sources or in bulk? Spending can creep up without us noticing, so look at trends, is your expenditure higher now than this time last year? Is that due to growth? or something else?
How much cash do you have in the bank? How many months worth of expenses would that pay for if you didn't make any further sales? How does your cash balance compare to this time last year? How long are your customers taking to pay you? Do you have bad debts? How long are you taking to pay your suppliers?
Free Financial Health Check
A page of numbers isn't for everyone though, and that's why we're offering small businesses a free financial health check for a limited time.
We'll review your accounts, share a Health Check Report and hold a 45 minute video call with you to work through our findings and help you set an action plan so you can get into the best financial position. We believe good finances start with good bookkeeping so we'll talk to you about just how we can support you going forward to keep you on track.