Are You Ignoring Your Small Business Financial Statements?

A lot of business owners feel overwhelmed by their accounting system, financial statements, and reconciliations so they just ignore it....until the end of the year. Financial Statements are like the ocean. You don’t want to turn your back on them for too long. And how can you make daily or monthly business decisions without up-to-date and accurate financial information? How can you even begin to plan how to grow your business without current income and expense figures? Here are the biggest problem areas I see on a regular basis:

What is your current financial state?

Many business owners have no idea about their revenue and expenses. I'm often called upon for bookkeeping help by business owners who haven't looked at their books all year, let alone reconciled or produced financial statements. Or maybe they tried, but their financials aren't accurate because they don't know the ins and outs of accounting. This is understandable....the owner of a food truck, coffee shop, or hair salon probably doesn't have experience as an accountant or bookkeeper....but how can you make any financial business decisions without knowing your current financial state?

"I'm making sales...why am I so broke?"

A very common problem is that a business has plenty of work or sales happening, but they are struggling to pay their bills and make payroll. What's the problem? Well, in a word? Accounts Receivable. Ok...that's two words. But if you let your billing and collections lag behind...your cash flow will suffer. Making the sale is only half of doing business....you have to collect. The other major issue is expense creep. Not budgeting and accurately tracking and managing costs can lead to poor cash flow.

Looking Ahead

Once you've implemented the first two items, you can begin to put some financial forecasting in place. Forecasting without accurate books is like driving blind.....and you can only have accurate books through monthly account reconciliations.

Make sure your business bookkeeping is up to date, get a handle on your cash flow, make a financial forecast and grow your business.

Does your business need some help with bookkeeping? Check us out at www.portlightbusiness.com