Updated: Feb 16, 2022
Why Business Owners Need to Get Serious About Knowing Their Numbers
As a small business it is necessary to know your financials up and down. Better yet, you should know them better than the back of your hand. Your main financial reports are like the score board to your business: you must keep track of it if you want to know if you’re winning or losing. Here are the top three reasons why you need to know your numbers:
1. Making the next move: Knowing your financial situation will help you make big strategic decisions to help grow your business even more. For example, your income statement will tell you if you are in a good position to hire that floor manager or HR representative. Another example, say you have multiple locations. Now your statement from multiple locations will tell you if you need to advertise more for one location over the other.
2. Cash is King: Know how much cash you truly have on hand is huge to make those crucial business decisions. Just because your bank account is showing a balance of $44,354.21, does not mean you truly have that much. You need to consider all the floating checks and upcoming recurring payments. With that information, now you might change your mind from buying that new piece of equipment to repairing your current one. Knowing your true cash position is huge!
3. Tax season will be much easier to deal with: Find me a person that likes tax season and I’ll tell you that person is either lying or making bookoo bucks doing it. Keeping up with your financials will make doing your taxes that much easier, which will save your tax accountant time-- ultimately saving you money. Up kept financials will also insure that you are entering in every expense and getting all the deductions you deserve. Make tax season easier on yourself, know your financials!
If you have any questions, feel free to contact us.