Is your bookkeeping up to date? If so, are you using the information available to you to plan the success of your business? According to Merriam-Webster®, the definition of the word strategize is to make a plan for achieving a goal.Â
Do you set time to review your progress and create a strategy for success? How often do you analyze your profit and loss, balance sheet and/or cash flow reports? One of the most useful tools in your business is the financial information the accounting data gives to you.
Your profit and loss report can tell you the ratio of expenses to income which can be used to see if you are pricing your products or services properly. Many entrepreneurs think they have a handle on how much they are spending, but it’s often eye-opening to them to see the figure in black and white.
The balance sheet shows what you own (assets), what you owe (liabilities) and the value of investment in the business (equity) at a certain point in time. If you have a significant amount of debt, but not much in assets, that is a warning sign that you could be headed for trouble.
Reviewing these reports often is important to see trends and to allow you to make adjustments to improve the profitability of your company. If you don’t have the time and/or the software to do the bookkeeping, contact someone who can assist you with this task.
Using the information provided on the reports can also help you plan long-term goals, such as offering new products and/or services, expanding into a new area, or hiring an employee to help manage the growth of your company.
Use the information at your fingertips to strategize your success!