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What financial information on my business should I be looking at, when, and how often?
Answers from some of our board members….
GEORGE: In my business, being retail Canadian Tire stores, I would look at sales numbers every day, as well as the bank accounts. Each month I would have a full Profit and Loss as well as a Balance Sheet, i.e. monthly statement, given to me.
FLETCH: You do not have to be a professional accountant. You do have to be on top of all the key numbers in your business on a current basis. Some businesses want to know daily what happens to revenues or want to understand currency changes and commodity prices in real time. For other businesses, it is sufficient to take weekly snapshots of key numbers and get all detail within a week or so of month end. It is never sufficient to review quarterly figures after that quarter has ended. The truth of it is most good business operators “breathe” the core numbers of their business and manage them in their sleep.
DOREEN: In retail, as in all businesses, one should have the year-end profit goal front of mind at all times. This may mean checking daily sales figures in view of the month end numbers. Monthly Profit and Loss and Balance Sheets should be scrutinized; making sure the business is on track for a successful, profitable year end. This helps, as well, in picking up downturns and business patterns to better adjust for the months ahead.
MEIRION: When running a company or the division of a company, you should ensure that all products are priced at the maximum price the market can bear. Make sure you know the fully-loaded cost of all products, monitor your overheads closely and, most importantly, watch your bottom line very closely at all times.
SHISHIR: I routinely (monthly) tracked my financial records (Profit and Loss, Balance Sheets, cash flows, accounts receivables) as well as my efficiency and productivity ratios. These are some of the KPI’s (key performance indicators)… the dials in your business dashboard. These are simple to set up and critical for making corrective and proactive decisions. I always paid special attention to any trends that start appearing in these numbers.
“You can’t manage what you can’t measure.” Peter Drucker
BARBARA: In running a professional firm, I would want, once a week, current assets information, the bank balance, accounts receivable (aged), work in progress (unbilled time and expenses chargeable to clients) and current liabilities. Once a month I would want a Profit and Loss Statement and a Balance Sheet with comparative figures for the preceding year and comparison with the budget. A cash forecast is essential and must be adjusted to reflect changes as they occur. Since revenue depends on billable hours, I need an analysis of time spent by staff in total and the billable portion as well as categories of non-billable time (vacations, educational seminars etc)
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