March 20 , 2024
Most business owners probably didn’t enter the business world to become experts in finance and accounting, but out of a passion for their customers or services. Even so, business owners often have to take on many different roles as they grow their business: marketer, salesperson, human resources, accountant, etc. The list goes on. A blind spot in any one aspect of business has the potential to gum up operations (and revenue!), none more so than with your finances.
Company finances are so complex and overwhelming that it can seem impossible to glean any useful information. Reading financials feels like an avalanche of figures and reports, and filtering through it all is a job in and of itself. (One that CFOs are paid handsomely for, in fact.) However, a successful business should be able to pinpoint exactly where their money is going and what it’s doing at any given time.
Once you know what your money is doing and where it’s going you can start to make informed decisions about the future of your business. Financial visibility allows you to analyze how long it will take to pay off that new piece of equipment you’ve been monitoring or whether or not you can actually afford to give your employees the five percent raise they have all been asking for. There is nothing worse than making a big decision only to find out you didn’t have the backing to execute it and scrambling to find a way, but that is how most business owners find themselves running their business.
Stop scrambling and start planning. Wouldn’t it be nice to anticipate your taxes throughout the year and plan ahead instead of getting hit with unexpected fees come April? What if you automatically knew how much money you have made on any given day and could predict what you were going to make two or three weeks any advance with minimal variance? When was the last time you actually hit your annual budget? Financial visibility opens all of these doors.
Now, you might be feeling a little overwhelmed with financial visibility at the moment. It can sound a bit like a secret recipe that would solve all your problems if only you could get the mixture right, but somehow you never quite seem to get there. That’s okay. Financial visibility is not created in a day. It’s a process that builds over time.
Get started by analyzing which areas have the biggest impact on your business. Is it sales activity? Operational costs? Then ask whether the reports you are seeing are really serving you. Do you get them frequently enough to matter? Is the data you are tracking meaningful or just easy to access? What else would you like to know? Finally, sit down with your team, and maybe an expert of two, and create a plan to improve your financial data one department, product, or service at a time. This way everyone is involved and understands the impact of their role and you can get the information you need.
Still feeling overwhelmed? Or maybe your team doesn’t have time to work on additional financial reports? That’s okay too. Call CLS. We can help.
