Knowledge is power

April 29th, 2016 | Posted in Business Organisation

Financial knowledge is power

Monitoring Financial performance indicators is key to business success and achieving business profitability.

Could you drive your car any significant distance without knowing some key performance indicators about how your car is operating?

These include tools such as

How much fuel do you have?

What speed are you travelling at?

What is your engine temperature?

Knowing these answers provides the key indicator of whether you can make it to your destination at a particular time, therefore knowledge is power.

It is the same in business without a tracking device or a system to record how your business is going it is difficult to track how your business is tracking both strategically and financially. Without this knowledge there is no benchmark set to improve performance.

Three simple strategies can be implemented to create more meaning in a business

  1. Put a budget in place and monitor performance to budget
  2. Monitor performance to historical
  3. Know where your money is getting spent on and place ratios to ensure spending is controlled and allows for a healthy cash flow.

Bookaid is a boutique bookkeeping firm and is focused on solving business problems in the SME sector. If you would like assistance in financial planning or bookkeeping needs email me directly at nadia@bookaid.com.au

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