Understanding your BUSINESS FINANCES
CAN YOU ANSWER YES TO THE FOLLOWING QUESTIONS ABOUT YOUR BUSINESS?
Take a look at the questions below. If the answer is "No" or "I don't know" to any of these questions, then we ask that you take a few moments to learn more about the services that we provide.
Let's see how you fare.
Do you have financial systems in place to maintain up-to-date records and plan proactively?
What are your financial goals? Are you on track?
Does your business goals align with your personal goals?
How much do you need to make in your business in order to achieve your personal goals?
Which services or products bring in the most revenue?
Which marketing strategy is earning you the most money?
How much does it cost you to acquire a new client?
Do you talk to your tax professional several times throughout the year?
How much should you be saving for taxes each month or paying in taxes each quarter?
Does your business offer tax advantageous benefits to you and your team?
If the answer is "No" or "I don't know" to any of these questions, then take the necessary steps to gain a better understanding of your business's finances, improve your bottom line, and reduce your tax bill.
Keep Accurate Records
A very important part of operating a business is keeping up with all of the money coming in and out of the business. In addition to cash flowing in and out, you also need to keep up with things such as owners contributions, owners distributions, loans, credit card transactions, equipment purchases, and depreciation of equipment.
If you are not an accountant and will be handling the bookkeeping tasks for your business on your own we recommend that you consider consulting with an accountant to set up your accounting system and provide bookkeeping training. It is better to have things set up correctly from the start. If you have already been performing the bookkeeping responsibilities and are not sure if you are doing it correctly have an accountant review your records.
Another option would be to outsource your bookkeeping responsibilities to an accountant.
CASH FLOW Projections
Need to project your future income and expense for your business? Planning can help you make more accurate financial decisions for your business. It can help you determine how much additional revenue you need to bring in order to reach a certain level of profit or cover a certain amount of upcoming expenses. It will also help you, as the owner, determine whether or not you can pay yourself and how much you can afford to pay yourself.
Of course you are in business to make a profit. Do you know which services bring you in the most income? How are you spending your money? Are there some expenses that you can reduce? What percent of your income are you retaining as profit for your business? Has your income increased or decreased over the past 6 months? These are some of the questions that analyzing your finances can help you answer.
Do you want to know if your business is really healthy?
Are you satisfied with your business’s current financial picture, but want to make sure it will continue to thrive?
Is your business struggling, but you’re not sure why?
Every story you have to tell about your practice shows up in your financials. Financial benchmarks can be used as a guide for evaluating the financial health of your business. It is up to you to determine what works for your business based upon your goals.
Examples of financial benchmarks that you may want to track are revenue per employee, owner’s compensation as a percent of revenue, how much you are spending to acquire a new client, revenue by service category, average revenue per client, and time utilization rate per employee.
HOW WE CAN HELP...
Organize financial records
Help you develop a work flow to track financial transactions
Create financial reports that tell you how much you are earning and where you are spending your money
Help you understand how to read your financial reports
Identify financial trends
Determine industry benchmarks to be used as a guide for financial progress
Determine current and projected future cash flow needs
Be prepared for tax season
Check out our list of tools that can assist you in managing your business's finances. Choose the financial tools that will work best for you.