[ad_1]
With businesses facing complicated headwinds in 2023, the question arises: Is there scope for business growth in tumultuous times?
Louw Barnard, CEO and Founder of Outsourced CFO, believes it’s more than possible.
“It’s important to understand your business’s current financial situation,” he says. “The financial position of your company is important not only for the day-to-day running of your business but also of crucial importance if you ever decide to shop around for investment capital. Your financial strength can be a clear indicator of the potential of your company and a selling point for investors. Analysing your current financial situation means a complete evaluation of categories such as assets, liabilities, equity, expenses, revenue, and more. These elements are measured through various business-related financial formulas that allow you or your finance team to get an exact overview of your financial outlook.”
Are there any ways to improve the financial position of the company?
We asked Barnard if there were simple things business owners could do. He suggested four basic starting points:
“Financial planning is essential. If you want a clear understanding of how your business is doing financially in order to plan and strategise, a fairly thorough understanding of your financial statements is essential. Keep in mind that your financial statements are only a starting point for analysis and that you will need the assistance of a Chief Financial Officer (CFO) to consult and help you identify any red flags and really dig in for useful trends.
“For instance, if your accounts receivable is lower than in the previous budget year – it might mean that you are invoicing less – or actually collecting your money faster. So the numbers are really only the beginning. The key is to use your statements to spot trends and anomalies, and then follow these up with further investigation in order to draw a useful conclusion that can be turned into an action…
[ad_2]
Source link
