Financial Management

Why is financial management important?

Sound financial management is at the heart of every business, no matter how big or small. Without it, even viable and potentially profitable businesses will fail.  For many business, it’s not a lack of customers or poor-quality products or services that are responsible for their demise it’s generally a lack of cash. By understanding the basic skills needed to run a small business, like doing simple accounting tasks, applying for a loan or drafting financial statements – business owners can create a stable financial future and avoid failure.

Make sure that you know how to read and interpret your financial statements (i.e. profit and loss, balance sheet and cashflow statement). Failing to understand your own business’s financial statements puts you at a serious disadvantage in making good business decisions and in dealing with your lenders and owners.

The assets of your business drive your financial picture to a large extent, so you need to know how to manage and protect those assets to maximise their value to the business.  It’s also important to step back and take the time to forecast, plan, and budget for short to medium growth.  Having a competent financial accountant will provide clarity and control over your numbers so you can make the right decisions for your business’ future.