Now is a good time to seek further advice in relation to these questions. Preparing real time management reports and having a budget has a value that goes beyond their use as supporting documents to loan applications and tax returns.
We suggest management reports and cash flows are prepared monthly or quarterly at a minimum and you have an annual budget for your business.
Regular preparation and analysis of management reports helps your business evaluate the past and current financial condition of your business and diagnose any existing or potentially future financial problems – such as high operating costs, sluggish sales, poor cash/working capital management and inventory mismanagement.
Having a budget in place means you can easily see, over the year, which months you are making a profit and you can track this against individual months to see how your business actually performed in relation to your budget. You can easily identify any differences and make timely business decisions to get your business on track to achieving your business's goals and objectives. Most importantly, a cash flow projection allows the user to see any cash flow gaps that require attention, or if cash flow allows dividend opportunities.
Please feel free to contact us at Champion's to discuss planning your business for success.