Most experts agree the most common reason for business failure is not having enough cash, funding that launches your new business. Even if your small business starts out with adequate capital, failing to manage your finances properly can stifle growth and ultimately bankrupt your venture.
What are the most common financial mistakes your business may be making? Accounting professionals were asked what their clients’ most common financial errors were, and here’s their list of concerns.
Not having insight into the business’s finances is the top mistake, cited by nearly 50 percent of accounting professionals. Speaking with the company’s accountant only at tax time is number two. Finally, the third biggest error is failing to link financials to business goals.
Experts are often slow to give away free advise, but one thing they will tell is, don’t just input your numbers and forget about them, use them to monitor your performance and assess whether you are reaching your business goals. “Looking at your company’s financial performance regularly and use past financial statements to project forward revenue, expenses and cash flow. You can’t manage what you don’t measure.
Your accountant should be a vital part of the equation when making long-term decisions such as taking on partners or investors, planning for succession, getting ready to sell your business, etc. If you’re only talking to your accountant once a year, you’re selling your business short.
You should also use your financials to project and plan for the future. As a business owner, you need to be thinking about and planning for the future. If you’re not looking five to 10 years ahead, be advised, your competition is.
Every Wise Business Plan includes professionally prepared financials, but we’re here to help in other ways, too. Contact us today to learn how we can help you understand your company’s financial outlook and plot a course for success.