Business owners often prioritise turnover and overlook the importance of reviewing their finances in detail each month which can lead to missed opportunities for improvement. They can find themselves caught up in the day-to-day operations and working “in” the business rather than taking the time to work “on” the business. You may be able to relate to this.
However, this can hinder long-term growth and strategic planning and therefore it is crucial for business owners to allocate time for financial analysis to ensure the overall success of their business.
Implementing a monthly financial checklist can help you manage the daily operations and plan for the future, allowing you to steer your business towards your goals more effectively.
Below we have outlined the key elements of a simple monthly financial checklist that we recommend for all our clients.
Review income and expenses – analyse sales and expenses to assess the overall performance of the business. Identify any significant changes or trends that may require attention.
Cashflow data – a cash flow statement reports the cash going in and out of your business. This gives visibility over how much cash is available to cover expenses. It also helps to identify any potential cash flow issues and take necessary actions to maintain a healthy cashflow.
Related article: 7 rules to manage small business cashflow
Budget analysis – compare actual financial results with the budgeted figures. Identify any variances and investigate the reasons behind them. Adjust the budget if necessary to align with current business conditions.
Track inventory – assess inventory levels and identify slow-moving or obsolete inventory.
Payroll and staff – ensure your payroll liabilities are up to date (i.e. pay as you go withholding tax, superannuation, payroll tax and workcover).
Tax status – Ensure compliance with tax obligations including lodgement of tax returns and payment of income taxes. Stay updated on any changes in tax regulations that may affect the business.
Accounts payable – Pay your suppliers on time to generate goodwill. Review their services. Are you still receiving good value or is there an opportunity to renegotiate fees and terms?
Accounts receivable – review your accounts receivable to make sure all invoices have been paid and address any late payments.
Debt Management – keep track of outstanding debts, loan repayments and interest rates. Evaluate the impact of debt on the business’s financial position and consider refinancing options if beneficial.
Give us a bell
The team at Port Phillip Group can help. If you have more specific requirements for monthly financial reporting, please give us a bell on (03) 8790 7700 or email us at reception@portphillipgroup.com.au. Our accountants are located in our Mt Eliza offices, and we support local businesses across the Mornington Peninsula and throughout Melbourne.
