Accounts, Bloody Accounts.
Do you feel frustrated and bewildered by your financial statements? Do your accounts make sense to you? Do you make best use of them for your business?
Understanding financial statements is essential to the success of any business and yet in a survey carried out in Northern Ireland over 52{f9759586bde9aae26041f7c5d30a2f7e6dd9dbb8958c8825ec70079a0c78198b} of business owner do not fully understand their accounts. Surprisingly 15{f9759586bde9aae26041f7c5d30a2f7e6dd9dbb8958c8825ec70079a0c78198b} do not always receive a set of annual statements. And a staggering 72{f9759586bde9aae26041f7c5d30a2f7e6dd9dbb8958c8825ec70079a0c78198b} do not use accounts as a basis for budgeting and decision making.
Financial statements have a value that goes far beyond determining your tax liability and appeasing HMRC. They should be used as a roadmap to guide you along the road to business growth and success. Preparing financial statements at the end of your accounting period is not enough in today’s competitive and depressed marketplace.
A set of financial statements can provide valuable information if you know what you are looking for. Key performance indicators (KPI’s) should be extracted and reviewed monthly to ensure you remain on track or enable you to take timely corrective action. By calculating some basic ratios you can tell how well your business is doing, what your profit margins are, how well you collect your accounts receivables, how this compares to the speed at which you clear your accounts payables, how fast stock is moving, as well as how much exposure you have towards debt. The results can be compared monthly to see if your situation is improving or slipping.
Financial statement analysis will help you manage your business more efficiently and effectively, identify areas of concern, benchmark against industry norms, and help you plan for your future success.
Dawn McLaughlin & Co Chartered Accountants provides a wide range of professional support services for business and community organisations. No matter which sector you are in or size of your business, we have cost-effective solutions that can be tailored to suit your needs.
Understanding what you need to empower you to grow your business is vital for profitability and success. To discuss your business development needs contact Dawn on 02871 370886 or via email [email protected]
