As a business owner, it’s not uncommon to wear many hats, and have to juggle a variety of tasks on a daily basis. It might be sales, it might be recruitment or it could be Operations. Whatever it is you have on your plate, one thing’s for sure: financial reporting often falls to the bottom of the list. There’s no doubt about it – it’s many business owners’ least favourite part of the job. We’re here to tell you why it should be a priority.
In recent months, we’ve highlighted the importance of being aware of cashflow, and monitoring your business’ incomings and outgoings. Linked in with that though, is monitoring performance. Amidst the potential for uncertainty, these two things go hand in hand, and both are key to the survival of a business in the long run. Think about it – if you aren’t tracking your financial performance, how can you plan ahead and strategize for the future? Let’s look into how to get started.
First and foremost, consider how often you’re currently reviewing performance. At a minimum, this should be monthly, but there’s no harm in more regular monitoring. At a base level, looking at performance monthly is key because you run the risk of glossing over negative stock levels for example, or maybe there were increased drawings across the month. Whatever it may be, without looking at your reporting, there’s no way of knowing how well your business is actually doing.
Once you’ve determined how regularly you’ll be monitoring performance – and this may depend on the size of your business in the first instance – it’s time to set some markers of what to actually look for. This might also depend on the nature of your business. A good starting point is to do a comparison of your actual performance against your budgeted performance – on the basis that your budgeted or forecasted performance is something you deem acceptable. If the performance is unsatisfactory, how do you plan to stick to that budget? Set some goals to ensure your business stays on track.
Now that goals are set, looking at mechanisms to help with monitoring performance can be highly beneficial. If you’re short on time or maybe you’re just looking for a way to simplify the reporting process, using a platform like Xero or Spotlight can make the process worlds simpler, in that they pretty much do the work for you. There’s no harm in utilising the range of software and technology available, and we have a team specially equipped at PKF Kendons to guide you through them if you’re unsure where to start.
We know how difficult financial reporting can be, and how to know what to look out for. If you’re unsure what steps to take or how to know the good from the bad (as uncomfortable as that might be), have a chat to us and we’ll help get you on track. We know that the more you know your business, the more you can achieve. Ready to get started? Contact us on 04 566 4399 to have a chat about how we can help.