Last time, we provided you a checklist of things to have in place for healthy financial management. This week, we want to continue our discussion on financial health for your business.
Why is it important to know your company’s overall financial health and to do checkups regularly? A good financial process will assist you in making broader financial decisions as well as day-to-day decisions.
Consider the following items when evaluating your company’s financial health:
1) Review your Profit and Loss and Balance Sheet reports – Include any additional key players on your team in these reviews. Be sure they understand these reports so they can offer input.
2) Start all monthly/quarterly meetings with a financial update - This keeps key team members in the know and helps explain targeted goals. Have a consistent time and place as well as know who really needs to be in the room for each meeting.
3) Be aware of Sales Goals and Sales Pipelines - Have these in writing with clearly defined benchmarks. Comparing sales from last year to this year can also help you keep track of any increased revenue.
4) Know the costs for your business - Have an understanding of how your company spends money and where cutbacks may be needed. Refer to your yearly budget and consult experts. Sound financial information is beneficial when you are figuring prices and selecting what vendors you can afford.
5) Continue planning for the future - You want to constantly be innovating new ways to add value to your company and customers. Know your key services and products. Keep track of the ones that are most popular/profitable and analyze why they are successful. Your documented financial management processes can also help you grow your business when you are ready to try new ventures.