Although we may still have some warm temperatures, officially summer is over and fall is in the air. This is a good time to do a quick check-up on your business’s financial statements and see if there are any changes that you may need to take care of before the year’s end. Below is a list of things that may help you determine the health of your business.
- Balance sheet reconciliations.
Regular monitoring can highlight vulnerabilities, which can provide you with time for corrective action. You should reconcile each asset and liability account every quarter. A well-supported balance sheet helps you make decisions about your:
- cash reserves
- debt financing
- inventory management
- Debt service coverage.
Be sure you have enough cash to sufficiently handle principal and interest payments. Assess your cash flow to ensure you can handle both current and future monthly loan payments.
- Projected expenses.
How much did you expect to spend so far in 2021 on salaries and wages compared to what you actually paid your employees? What about other big expenses like rent or insurance? You should conduct a variance analysis of your expenses. Take the amount of money actually spent so far in 2021 in each of your major expense accounts and compare it to your spending forecast. Then you can create an updated forecast for the balance of the year.
- Projected revenue.
Examine your income statements and see how your revenue has performed so far this year compared to what you thought your revenue would be. Does your revenue vary from what you expected? Have your marketing team look it over to pinpoint what is better or worse than you expected.
A review of your financial statements now will help you be prepared if you need to navigate an obstacle or capitalize on potential opportunities to expand your business.
Are you ready to get an edge on your competitors? At Summit CPA we offer multiple resources and techniques to help you get on the right track to attain your goals. For more information on how we can be of assistance to your company, contact our office at (866) 497-9761 to schedule an appointment with our advisors.