Sound planning is one of the most critical factors to the success of your business. Before you started your business you likely put together a plan for your start-up expenses and projected monthly revenues and expenses. Now that your business is up and running, your plan will need to be adjusted regularly to match your actual performance.
If you’re like most small business owners, time is your most scarce resource. Conducting a monthly or quarterly financial health checkup with a professional at Accel Tax & Business Services can provide a substantial return on your financial planning time because it allows you to leverage the expert training and experience of a professional who advises many small business owners.
By reviewing the following aspects of your business, we can help you identify and correct problem areas before they become crises.
Here are some of the things you need to think about when you conduct a periodic checkup on your business.
Key Performance Indicators (KPIs)
KPIs vary for each type of business. We can help you develop KPIs most relevant to your business, formulate them into a dashboard, and review them with you on a regular basis. We can also provide you with comparative data based on their extensive experience with other businesses as well as other industry sources.
Strategy and planning
Small business owners don’t have the luxury of a strategic planning department, and daily operations consume most of your time. We can serve as your strategy advisor and help you boil your strategy down into measurable goals and review your progress on a regular basis.
In the beginning, your sales forecast was based on market research, your sales and marketing plan, and your best estimates based on experience in your industry. Even the best start-up sales forecasts need to be reworked in light of new information you’ve learned from actual operating performance. Because we advise many small businesses in many industries, we have extensive experience with sales forecasts and can perform a periodic checkup to see whether your sales forecast is realistic in light of your specific circumstances.
Gross profit margin
Amid frequently changing costs and pressure to make sales, many small business owners find it challenging to keep up with whether they’re maintaining adequate profit margins to sustain their business. We can help you calculate and track gross margins by product or service, by customer (or customer group), or by job. Most importantly, we can help you identify causes of margin erosion and recommend changes you can make to get your margins back on track.
Cash flow forecasting
Cash flow management makes the difference between success and failure for most businesses. We can provide you with the kind of professional cash flow forecasts an in-house finance department would provide to management in a larger business. We can help you answer the questions: What will our cash balance look like during our slow season? Will we need to borrow to cover shortfalls? Do we have a large enough line of credit?
Accounts Receivable (A/R)
Accounts receivable can be difficult to forecast until you have enough history to identify trends. In many cases, we have access to trend and benchmark data for other businesses similar to yours and can help you forecast seasonal fluctuations and compare your A/R performance to industry benchmarks. We can also help you identify needed adjustments to your credit and collection policies.
Accounts Payable (A/P)
Sometimes an accounts payable problem arises suddenly. But, more often, problems develop over time and can be corrected before they become crises. We can review your accounts payable and help you develop a plan to resolve payment issues and prevent them from occurring.
For many businesses, inventory is a major draw on operating capital and cash flow. If your business has seasonal fluctuations, inventory forecasting can be difficult. We can help you forecast your inventory needs and evaluate inventory financing options from suppliers, local banks and commercial lenders.
You don’t want a big surprise tax bill when you file your annual return, but you don’t want to tie up more capital than necessary in your estimated quarterly tax payments. We can check your performance and projections against your estimated tax payments to help you avoid surprises at tax time.