Despite the Federal Government’s cashflow stimulus measures and JobKeeper payments, the past year has played havoc with the finances of many businesses.
The past year has played havoc with the finances of many businesses.
Despite the Federal Government’s cashflow stimulus measures and JobKeeper payments, many business owners remain especially cautious about their activities, not to mention the huge emotional toll the past 10 months has taken on many.
Clients continue to approach us with the following queries:
- How much money do I have to make each week to remain operational?
- What’s my runway look like – i.e. when will I run out of money?
- Is each product or service line still making money?
- I need visibility on the numbers, where do I start and what can you do to help me with this?
A lot of businesses utilise their accountant for compliance matters only such as lodging income tax returns and helping with GST queries when lodging Business Activity Statements, etc [some of our clients are no different utilising only our financial compliance function only].
But we should be used for far more than just compliance.
Items we have been assisting our clients with include:
- Financial reporting – regular and frequent reporting points
- Calculation of break-even points (how much do you have to sell each week or month to break even?)
- Financial forecasting including detailed Cash flow projections in both the short and long-term
- Product or service line financial viability with focus on COVID impact points i.e. supply chain interruptions, market stability, price impacts etc
- Assisting the client’s finance team to improve and regulate reporting to the decision-makers
- Development of strategic business plans.
- Development of cash reserve policies
In these times the ability to be nimble and having accurate information at your fingertips could be the difference between business success or failure. Remember the point of planning and knowing your numbers is to know your business on a more intimate level. This will lead you to making better decisions faster, enabling you to promptly act to any changing business environment and eventually, lead to you realizing the rewards of a highly successful business.
Craig Hailston – Accountant, Business Advisor and SMSF Specialist