top of page

A Guide to Reviewing Your Business Financials

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


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.


bottom of page