Financial reports are often like the night sky – dark and hard to fathom until you talk to someone who understands what they’re seeing.
“So what are these numbers telling me?” Have you ever found yourself looking at financial statements and asking this?
Sometimes the answer is a brutally simple “not much” if there’s no detail behind the headline figures or your accounting system wasn’t set up with a bit of forethought.
More often there’s meaning – if you know where to find it and have the right telescope.
Should You Be Worried About Cash Flow?
For example, a business might look at their outgoings and worry that they have a looming cash flow crisis. They might put off an investment or ask the bank for more credit as a result of what they believe.
Look deeper. Maybe there are a lot of overdue accounts. Or too much inventory. Getting someone to hit the phone and chase up late payers or delaying stock purchases could release all the cash you need.
Where Will Capital Work Hardest?
If you’re ready to invest, how should you target it? Interrogating the data will help you decide where to invest funds for a better return – and which parts of your business would do nothing more than eat up valuable capital.
Accurate and usable historical data will help you put a robust cost-benefit analysis together and create a sound business case, which will be invaluable if you want to borrow to fund the investment.
Are We Doing Things We Shouldn’t?
Interpreting your financial data can reveal what each business activity costs – including functions that could be more profitably outsourced.
Perhaps there are parts of your business where margins are declining and there’s no easy way to turn things around? It’s probably all in your financial numbers, waiting to be discovered and acted upon.
Turning numbers into usable data and insights is a step towards building a profitable and sustainable business. And that’s where Rosy Jeffery Chartered Accountants can help.
Make your numbers make sense. Contact us at Rosy Jeffery Chartered Accountants on 01297 639 457.
