It's time to book some time in your diary, because it's your Accounting Catchup Month!
Today we'll go through some weekly action steps so over the next month you can catch up on your books and project activity going forward.
Week One - Reconcile & Tidy
Week One is about tidying the accounts so they give you a good picture of where the business is at. It's also a good time to check:
- Have you loaded all your invoices for payment?
- Have you included all expense invoices, including those paid for personally?
- Have you updated your fixed asset register?
Try to tidy as much as possible, it might be useful to engage with your Bookkeeper here.
Week Two - Review the Business
In your next session its the goal to review how the business is performing, and where it's at. The reports you'll want to prepare and review will be:
- Profit & Loss
- Cash Flow Statement
- Balance Sheet
These reports mean you can review your revenue, expenses, assets, liabilities and cashflow. This is also where you can review some KPI's in your business, for example how long customers are taking to pay you and what is your average monthly revenue. You can also review performance to prior forecasts. To assist with this you might want to engage with your Accountant.
Week Three - Looking Forward & Identifying Trends
We'll devote a whole session to this as this will drive a lot of information for Week Four. The keys here are to keep in mind past performance, but identify what has changed since:
- Have you taken on new employees, or will likely do so?
- Have you gained/lost particular customers that will impact going forward?
- Have you just increased your prices?
We find it useful to separate this from the actual forecasting, as it can get messy! In weeks Three and Four you should look to engage with your CFO and Business Advisor.
Week Four - Forecast
Now that you have a solid starting position and predicted the future, it's time to invest some time in forecasting your performance out over the next 6,12 or 24 months. To do this you can use spreadsheets in Excel or Google sheets or if using Xero there are some good add-ons available (current favourites are Float, Crunchboards and Spotlight)
Forecasting means you can prepare for new business conditions, meaning you can react faster to new opportunities. The process of forecasting can also prompt decisions or discussions that you've been putting off.
Although it certainly can look like a lot of work, we hope that you find this method useful. The trick to these kinds of tasks is to break down into bite sized chunks, rather than attack it all at once and get a poor result.
Should you have any queries about the above please contact us
Disclaimer: Information provided to the best of the authors knowledge at time of publication. Laws are subject to change and independent advice should be sought. The above information is general in nature and should not be construed or relied on as a recommendation.