The Quick Wins For Your Business Financial Management
The most commonly overlooked source of detailed information about your business is your business financial system. Your system (often MYOB, QuickBooks, Xero or similar) has a wealth of information you can use to improve your business financial management. As long as your system is kept up to date and accurate you can use the following reports to strategically manage your business for growth rather than worrying about where the next dollar is coming from.
Who Owes You Money
The Accounts Receivable Ageing report shows who owes you how much and when it was due. You should review this regularly to ensure you are actively chasing slow payers. Make sure you implement and use a defined credit and collection process. Big businesses do and so should you. This analysis also feeds into your cashflow forecasting.
Who Do You Owe Money To
The Accounts Payable Ageing report shows who you owe money to and when it is due. Don't pay people early! Always attempt to pay your bills on time so as not affect your credit rating.
Cashflow Forecast
You should be using a cashflow forecast model such as the free one Avegna offers showing your daily cashflow position and estimates. This important tool shows you to the day when you might run out of money giving you as much warning as possible so you can take alternative action.
Reguarly Weekly Management Reports - Understand the KPI's
We encourage all our clients to look at the Key Performance Indicators of their business weekly. This give you a hands on view of what is happening in your business and can alert you to urgent action points. Simple reports such as Sales by Rep, Sales by Product, Margin by Product, Margin by Rep, Productivity Reports by employee, productivity reports by business area or division are key things your MYOB etc can be used to easily tell you what is really happening in your business. Don't wait for month end or year end!
Monthly Financials
Smart Business Owners review high level number trends in their monthly financial reports. As we say this is "using big business tools in their SME business". Big companies do this, they have regular board meetings and management meetings and discuss these reports (P&L, Balance Sheet, Cashflow Forecast, KPI Dashboards etc), why shouldn't you? If you don't know what you need to look at our need help understanding these numbers then ask someone who does. This is exactly the sort of thing Avegna do for their clients and why the clients who act when required are succeeding in continuing to grow their business even in today's tough economic environment.
For any further information on the issues covered in this article please contact us. We offer a free, no obligation initial consultation.
Scott Lyall
CEO of Avegna
Back | Back to top
