As we approach the midway point of the year, now is a great time to do a “health” check-up on your business and its finances, especially if you haven’t done one recently (or ever). The importance of regular financial check-ups for small businesses is imperative for understanding how your business has performed in the last months or years and helps you project and plan where to go in the future.
Why is a Financial Check-up Important?
Any business owner knows what their goals are, no matter how properly established they are. A financial check-up is the best way to determine whether you are meeting your goals or are on target to meet them. If you’re not, then it’s important to determine how to change course and adjust where necessary.
In order to get yourself back on track, you first need to understand your current situation. How much revenue is coming in per month? Have you expanded any of your services? What areas of business are
succeeding the most and which are struggling the most, and why? Below is a list of steps to take to make the most out of your financial check-up.
Review Your Financial Statements
Reviewing your financial statements is a good way to make sure that your books have been kept and are up to date. This includes your profit and loss statements, cash flow statements, and balance sheets, which your accountant can also help you review for greater clarity if necessary. This is the time to look for any irregularities, cycles, and trends as compared to your last financial check-up that can help you make informed decisions about your business and its growth.
Reassess Your Overall Goals
Whether your goals included specific revenue milestones, savings and investment, or employing new systems, a financial check-up part way through the year allows you to identify how close you are to meeting them. And if you’re just getting started and you don’t feel like you have concrete goals in place, it’s never too late to sit yourself down, reflect on how you feel about your business, and plan out some established, measurable, and actionable goals. You can always start small and work your way up.
Revisit Your Budget
It’s always critical to periodically check in on your budget throughout the year to determine how your revenue and expenses are faring. Expenses can get away from us easily, especially if we’re not keeping a close eye on them. Your check-up allows you to see what you forecasted in the beginning of the year or during your last financial check-up and see how well it aligns with the now. Revisiting your budget also enables you to determine how much money you have left over to reach any savings goals or make investments in your business.
Talk to an Expert
All aspects of running a small business can be overwhelming, whether that’s budgeting, taxes, forecasting cash flow, etc. That’s why speaking to a professional accountant or financial advisor can make a difference in helping you develop a plan that will cause you significantly less stress as you go along. To speak to one of our experts at Republic Bank, give us a call at 800-526-9127 and see our other small business tips here!