Tired of all the doom and gloom? Let’s forget what happened last year and finish this financial year on a high. It might mean you need to do a couple of things differently but they are simple to do once you know how. Learn more.
We’re now in the second half of the financial year so think of it as a clean slate. It doesn’t matter if 2020 was turbulent. What matters now is what you plan to do over the next few months because your future could look amazingly rosy with some planning.
Good planning begins with financial literacy. That’s why it’s so important for business owners to understand their numbers. We’re not born with this knowledge, however, it’s worth investing some time and effort into learn about it.
When you understand your numbers, you have the information you need to make informed decisions about the future direction of your business and the steps you need to take to get there.
The “F” Word in Bookkeeping
We’re talking Forecasting! Many established businesses don’t prepare a forecast – often because they don’t understand the value it provides, or even how to prepare one.
In simple terms, a forecast is an educated guess (or estimate) of what you think things like sales and expenses will be. At Numeric Eight, we recommend clients prepare a high and low forecast. It’s like a worst case scenario vs an achievable stretch goal. For some clients, we teach them how to prepare their own forecast and for others, we prepare the forecast for them.
Even though a forecast is an educated estimate on what might happen, it’s a powerful planning tool because you can easily track your results and cashflow against your best and worst case scenarios. Then each month (or more frequently if you’d prefer), you can compare what you actually achieved with your forecast.
You can also use your forecast to determine your staffing levels so you can establish whether you can afford to keep all your staff or have the capacity to hire additional staff.
A Financial Partner
When a business owner is considering becoming one of our clients, it’s often because they want to learn how to understand and monitor their numbers. They see the value financial literacy will give them and their business. That’s one of the reasons our Account Managers regularly meet with clients to review, explain and guide them on the financial health of their business.
Running a business is challenging but you don’t need to do it alone. At Numeric Eight, we look beyond the numbers to help you achieve your business goals.
To arrange an obligation-free, 30 minute consultation with Trudi from Numeric Eight, contact us. Trudi will be happy to discuss:
The pros and cons of changing your accounting software to something more suitable
The steps you need to follow if you are behind on your BAS and want to become compliant