As a small business owner, it's essential to regularly review your accounts to ensure the
financial health and success of your business.
1. Financial Statements: Review your income statement, balance sheet, and cash flow
statement for the previous months. Review specifically your turnover, expenses, and overall
profitability as this will help you to identify any significant things that require attention e.g.
increase in material costs or ingredients may require you to tweak your prices.
2. Budgets: Compare your actual financial results against the budget amounts. Identify any
shortfalls or where you have exceeded your budgets and investigate the reasons behind
them. This will help you understand where you may need to make adjustments to your
spending or look at alternative options for increasing your turnover.
3. Accounts Receivable: Assess the status of your outstanding customer invoices and
accounts receivable. Follow up on any overdue payments and consider introducing stricter
payment terms if necessary. This review will help you manage your cash flow effectively.
4. Accounts Payable: Review your outstanding invoices and accounts payable. Ensure that
you're paying bills on time to maintain good relationships with suppliers. If you think you may struggle contact suppliers and negotiate terms that you will be able to stick to. Look at your expenses to identify any room for cost savings.
5. Inventory: If your business involves selling products and holding stock, review your
inventory levels. Identify slow-moving and end of line items and consider strategies such as
discounts or promotions to sell them. The value of this stock is better to be turned
into cash in the bank rather than to be sat on a shelf doing nothing for you. You can also
review your re-ordering levels of stock to increase or decrease the amount to better meet
demand.
6. Tax Obligations: Ensure you are meeting all your tax obligations and deadlines. Review
your records and consult with your accountant to identify any potential tax-saving
opportunities or changes in tax regulations that may impact your business.
7. Profit Margins: Analyse your profit margins by product or service to identify which areas
are most profitable and which you may need to adjust. Consider factors such as pricing,
production costs, and customer demand to maximise your profitability.
8. Marketing and Sales Performance: Evaluate the effectiveness of your marketing and sales
activities. Review ideal client profiles, marketing mediums and key messages and then segment your audience for a more targeted and effective approach.
9. Business Plan: Take a look at your overall business plan and compare it to your current
financial performance. Are you on track to meet your long-term objectives? Consider
updating and revising your business plan to reflect changes in the market or your business
strategy if you need to at regular intervals throughout the period of the plan and not just
review at the end when there is no scope for making adjustments.
Remember to speak with your accountant for bespoke advice and
guidance based on the specific needs and circumstances of your business. If you are
struggling take advice as there may be options available to you that you are not aware of. If
you are exceeding your expectations, receiving the right advice could be equally important to plan for a rainy day or to invest to further grow your business.