Increase Your Odds to Stay in Business (Part 3 of 4)
In Part 2, we talked about the importance of knowing your numbers and how most business owners are flying blind with incomplete or inaccurate financial information. Now it’s time to take that a step further.
Having clean books is only the beginning. If you want to grow your business you need a complete financial system that works for you, not against you.
In this section, we’ll start breaking down the 16 elements that make up that system and show you how to put the first few in place the right way.
At the end, we will also give you some easier alternatives, but you need to first understand what it takes to have a good working financial system that will let you grow your business, in order to properly judge the validity of the alternatives. Once the flow of information from the bookkeeper to the accountant is reliable, you need to put systems in place to collect the correct information for analysis. The analysis of this newly collected information will allow you to fulfill some or all of the other 14 remaining elements.
How many of the 16 elements do you have in place?
- Lowest Practical System Cost
- Bookkeeping
- Tax Accounting
- Cost Accounting
- Managerial Accounting
- Bank Requirements Tracking
- Performance versus Industry Standards Comparison
- All Necessary Business Tax Filings
- Tax Planning
- Business Strategizing
- Cost Analysis
- Financial Requirements of the Business
- Establish Goals & Objectives and Track
- Trending
- Budgeting
- Forecasting
Having this information provided and analyzed will give you the right tools to make intelligent managerial decisions. In the military people are sent to “recon for intelligence” so that they will know what the competition, as it were, are up to. That “intel” is used to make smart decisions that will allow your side to win the war.
Getting your financial system in order is what separates businesses that grow from those that just get by. In Part 4, we’ll show you how to bring in the right help so you can stay focused on running the business, not buried in the books.
