When was the last time you conducted a financial review of your business?
Most Business Owners will be financially vigilant in the early days of their business, thoughtfully reviewing it’s financial performance and growth, because in these early stages there is a ‘fear’ of failure and it is crucial that a Business Owner is being vigilant over the business finances.
However as a business becomes well established and is running well, Business Owners develop a routine of working “in” their business and it is easy to forget to work “on” the business. A year or two, or many years, can quickly pass without any consideration being given to economic and industry changes affecting your business.
At the very least, Business Owners should be financially reviewing their business, and its’ performance, annually with their Accountant. A proper financial review of your business will assess how well your business is performing, highlighting your strengths and areas needing improvement, and identify actions required to effect necessary change
Your business cannot progress without thinking about the longer term needs of your business and your customers, and ensuring your business has a clear business direction and strategic plan in place to:
A clear business strategy will ensure you stay on track.
It is important to annually review the products or services that your business provides and assess which ones as profitable and successful, and what makes them so.
Questions you need to be asking in an annual financial review of your business include:
These and more key questions must be answered to improve the performance, profitability and efficiency of your business.
Economic, industry and market changes are not the only factors affecting your business and its’ performance. Every business must regularly assess the internal elements of their business, including:
To achieve continuous improvement in your business, and remain competitive, an Annual Financial Review of your business and not just a review of your Financial Statements, is required.
Ask your Accountant to provide you with a Financial Review of your business so you can stand back from your business and take a long hard look at where your business needs to improve its’ performance so it can continue to grow.
It is doubtful whether you alone will be able to answer the questions necessary to conduct a meaningful and effective Financial Review of your business – involving your Accountant and Business Advisor will help to make your business review more effective.
Once the financial review of your business has identified areas that require attention, boost your chances of success by putting in place a cohesive and strategic plan to develop your business and move it forward.
Paul Baggetta is the Founder & Principal of Baggetta & Co. Paul Baggetta has been a Taxation Accountant for over 36 years, a Financial Planner for over 18 years and in 1993 qualified as a Real Estate Licensee, holding a Triennial Certificate (currently not trading), and operated his own Real Estate business for property investment clients for over 5 years as a second business.
Financial planning services provided by Paul Baggetta as an Authorised Representative (No. 261469) of Capstone Financial Planning Pty Ltd. ABN 24 093 733 969. Australian Financial Services License No. 223135.
Taxation & Accounting services provided by Paul Baggetta as a Registered Tax Agent (No.61487008) and is a Member of SMSF Association, IPA & NTAA.
The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.
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The information provided on this website is for general guidance only and is no substitute for professional advice. It should not be used as a substitute for legal, business, accounting, tax, financial planning or other professional advice.