By : Vardan Pogosian
Most small business owners look to marketing strategies as they seek to grow a small business. Yet, it is the financial statements that tell the real story about the place where growth and goals meet. Growth requires financial stability with monitoring and analyzing the statements as the best tools.
Forecasting and Goal Setting
It matters less whether business bookkeeping is off-site or you do it yourself as there are few strategies to use to determine how well your growth meets your goals. Thus, it is important to make the time you spend with your statements easy for you and your eyesight. Here are some simple steps that can save time, effort and money:
• Separate business finances from personal finances. This means different banking accounts and credit cards, preferably at a bank that is unique for your business. Tracking finances is much easier when bank statements show business transactions only.
• Track growth over the short term and the long term. To make this effective, a cash flow projection is beneficial as a steering wheel toward the goals that you set. Short term is monthly and long term could be quarterly or another period that you pre-determine.
• Track the income and expenses consistently. Awareness of money coming in and going out helps determine availability of funds for making payroll and maintaining stability during times of fluctuating finances.
• Use simple accounting software or an easy budget template as you set up a cash flow forecast and monthly review of business. If numbers are not your forte, seek bookkeeping help or the services of an accountant as you set up this forecast.
• Be transparent with other members of your team to enlist their assistance in achieving the goals that result. Working in a vacuum cannot advance the business closer to meeting those goals.
• Take the time to review goals and objectives at the beginning of the month and a list of accounts receivable and accounts payable that you expect to transact during the month. Add missing items to the list and do your cash projection for the month. This projection does not need to be perfect.
Revealing Information Through Comparison
Comparing forecasts with reality, it is easy to adjust goals or to investigate further. When you understand the fluctuations, planning the next short term goal is also easier. Making adjustments could be your biggest business boost ever and may lead you to the realization that using an integrated accounting cloud service would be the most appropriate next step.
When you are ready to make that next step, it is important to try the software first. Contact CPA Vardan Pogosian to set up a free trial of the program that will help you understand and grow your business.
Vardan Pogosian is a former IRS Agent and a CPA in Glendale, CA. As an IRS Agent, Vardan’s experience includes auditing tax returns of individuals, small businesses, and multi-million dollar corporations. He is the founder of Pogosian and Company, CPA.