Keep track of your financials in a downturn could be the difference between your survival and a liquidation sale. Tom Shay of Profits Plus says your financials offer the tools you need to make informed decisions about your business.
Shay offers the following ideas on effectively watching the numbers:
- Monthly Financials Are a Must. They tell you what went right (or wrong) in the previous month, and offer insight on the next month’s decisions.
- Don’t Review Out-of-Date Financials. If you receive February financials on March 25, it’s too late to make a difference. Shay says creating monthly financials is not dependent on receiving the bank statement and balancing the checking account—monthly bank fees can be estimated in the financial statement.
- Look at How Your Financial Statements are Arranged. There’s no “one correct way” to arrange the information on your profit-and-loss statement. Instead, ask the accountant to arrange the information so it’s understandable -- and usable -- for you and your business.
- Create a Projectionary Cash Flow Statement. Determine your projections for the next year by using your last twelve monthly profit-and-loss statements. This information tells you how much money and inventory you will have on hand for each of the next twelve months. Your accountant should be able to help you create this valuable tool.
Take
The Tip:
Jewelers of America’s annual Cost of Doing Business Survey,is a useful financial-management tool that provides key performance
measures to help inform your financial reports, such as sales volumes
within store types; productivity ratios; inventory turnover; and balance-sheet
data. Jewelry retailers can order the Survey by clicking here – and use it as a reference for themselves and their financial
advisors.
Comments