tax update | Weinberg Partners

Proving Your Ongoing Business Viability Though 5 Financial Reports

Whether you’re applying for government subsidies, taking out a business loan or seeking investor support, you need to be able to demonstrate your ongoing viability as a business.

To prove this viability, it’s important to have the right financial information at your fingertips. This information is also just as important for your own internal planning and decision-making.

So, where do you start and what are the reports that you’ll need?

Prove You Are A Business With a Future

The numbers that prove you’re a business with a future

Any lender or government body wants to know that your business has a future.

As the owner, you may believe in the destiny of your company, but you also need the numbers to reinforce this argument. Banks, lenders and investors are taking a risk in backing you. Because of this, they want to know that you’re capable of making the agreed repayments, and that the business is in a financial position to deliver profits and payouts for investors.

Before investing in your business, organisations will want to see:

- Evidence of a healthy sales pipeline and sales revenue
- Manageable debt that’s not eating into your capital
- A positive cashflow position that covers your main costs
- Forecasts that show stability or growth in your revenues
- A meaningful business strategy for the next two to five years of growth

The data you need to plan your future

You can’t run a business on a wing and a prayer. With so many different ways to track and record your business data, there’s no excuse for not being up to speed with your performance, your targets and your forecasted sales, cashflow, debt and profits.

This information isn’t just useful when approaching investors and lenders. It’s also vital for your own strategic thinking, your business planning and your internal decision-making

Crucial management information to know will include:

Your targets and budgets for the upcoming period
Your sales and financial performance against these targets
Your basic financial position and health
Your forecasts for future sales, cashflow and end profits

The 5 key reports that define your company’s growth

Today’s cloud accounting software makes it a breeze to produce detailed and informative financial statements. These are the main statements and reports to focus on:

- Business plan – your business plan is a written document that outlines the company’s goals, strategies and financial projections for future success. It’s your route map for the business journey that lies ahead, and a crucial document when approaching investors.
- Sales reports and forecasts – sales reports give a historic summary of your past sales data, so you can track how you’re performing. Sales forecasts project this data forward in time to show future sales trends and potential sales growth you may achieve.
- Revenue forecasts – a revenue forecast is a projection of your expected income or revenue for a specific period. Being able to track and forecast your revenue position is vital information when carrying out financial planning and decision-making.
- Cashflow forecast – a cashflow forecast is an estimate of your expected inflows and outflows of cash over a specific period. By forecasting these cash inflows/outflows you can aim to keep the business in a ‘positive cashflow position (more cash coming in than cash going out).
- Financial statements – the main financial statements to keep your eye on will be your:
  - Cashflow statement – shows your current cashflow position, so you can make the most informed decisions about spending and cost management.
  - Balance sheet – shows your present assets, liabilities, and equity. It’s a snapshot that reflects the company’s financial position at a specific point in time
  - Profit and loss statement (P&L) – a breakdown of the income coming into the business, and the expenditure going out. Crucial for managing your profitability.
  - Aged debts – categorises and analyses your outstanding customer invoices, based on when they should have been paid. Keeping on top of this helps to speed up payment and improve your cashflow position.

Talk to us about proving your business viability

Having the data and evidence to prove you’re a viable and stable enterprise is crucial. It’s these numbers that will help you plan your growth and access the investment you need to scale.

We’ll help you create a detailed business plan, revise your strategy and produce all the financial and non-financial statements you’ll need to make informed business decisions.

As your adviser, we’re in the best possible position to provide your management information.

Get in touch to talk about your financial reporting.

The following content was originally published by BOMA. We have updated some of this article for our readers.

Getting in Control of Your Inventory – Unlock Efficiency and Cashflow

As a manufacturing or product-based business, efficient stock management is a big part of running a smooth operation.

But the way we manage stock and inventory has changed radically in the past decade, in no small part due to the evolution of inventory technology.

With cloud-based inventory management systems now available for even the smallest business, and direct integration with your accounting and finance systems, there’s no excuse for not being in control of your inventory and stock purchasing.

But with the ups and downs of the global supply chain in 2023, what can you do to get more from your stock, your inventory systems and the capital locked up in these stock assets?

How do you set up four financial systems to put yourself back in the drivers seat?

New ways to enhance your inventory management

With today’s inventory management solutions, it’s never been so easy to have complete oversight of your stock levels, popular products and restocking information. Data is king and the more information you have at your fingertips, the easier your stock management will be.

Let’s take a look at some important ways to get more from your inventory management:

- Use the latest inventory management systems – when you use cloud-based inventory management software you get the benefits of real-time tracking, accurate forecasting and seamless inventory control. This gives your operational efficiency a boost, reduces errors and optimises your stock levels, all of which can make your business more efficient, productive and profitable.
- Integrate your inventory app with your finance and business platforms – by integrating inventory management tools with your finance and business platforms, you streamline your workflows, automate key processes and synchronise your stock data. With all this info at your fingertips, you can make better business decisions, cut down the time-consuming manual tasks and enhance the performance of the business.
- Keep your stock management lean and agile – embracing lean stock management means only producing or ordering in the stock you actually need. This helps you to optimise your inventory levels, reduce carrying costs, minimise wastage, avoid stockouts and align supply with genuine customer demand. This cuts unnecessary waste and spending and makes your stock operations far more effective and profitable as a result.
- Sell off your surplus stock to free up cash – if you have stock sitting idle, why not sell this dead stock at a discount to turn these assets into cash? Your inventory management software can quickly identify surplus stock, allowing you to run targeted sales strategies such as discounts, marketing campaigns or customer events to liquidate excess stock. This is a fast way to generate additional revenue and boost your current cashflow.
- Reevaluate how big your warehouse capabilities need to be – could you move to a smaller warehouse facility to save cash and be more effective? The data you get from your inventory management software gives you deep insights into your stock movement. This gives you the evidence you need to decide whether downsizing could reduce overhead costs, enhance your operational efficiency and improve profitability.

Talk to us about getting in control of your inventory

Being the master of your inventory and stock management is an incredibly valuable skill for any product-based business. If you want to get in complete control of your inventory, switching to a modern cloud-based inventory management solution is an investment you won’t regret.

We’ll advise you on the best inventory software tools and how they integrate with your accounting and business platforms. We’ll also share the best tips on how to improve your operational efficiency, stock management and overall revenue generation.

Get in touch to upgrade your inventory tools.

The following content was originally published by BOMA. We have updated some of this article for our readers.

5 Ways to Get in Control of Your Business Finances

Having proper control of your business finances is a big advantage. It helps you make well-informed business decisions and keeps your organisation profitable.

With so many digital tools for managing your bookkeeping, accounting and management reporting, it’s never been easier to manage, track and forecast your financial position.

But what are the main tools you need? And how do you set up your financial systems, apps, processes and reporting to put yourself back in the finance driving seat?

How do you set up four financial systems to put yourself back in the drivers seat?

1. Bring your bookkeeping into the digital age

Digital bookkeeping apps are a great way to digitise your receipts, records and source documents. This not only saves a lot of time at year-end, it also makes it much easier for you to keep track of your company’s finances and accounting. Keeping your receipts in a box to manually enter at period-end is no longer enough. Take the next step and digitise your receipts at source, so you have up-to-date digital records and copies of source documents.

Optical character recognition (OCR) software, like Dext Prepare or Auto Entry, scans the receipt, converts it into a digital format and stores it in the cloud.

2. Do your accounting in the cloud

Cloud accounting is a software-as-a-service (SaaS) solution that helps you carry out all your main accounting and financial management online, without having to install any software.

Cloud accounting providers, like Xero, QuickBooks, MYOB or Sage, design their accounting platforms to take the pain and hassle of business accounting. You get all the tools and features you need to work on your accounting tasks. And your platform provider will also take care of all the data storage, backups and security of your data.

A good cloud accounting platform does more than just save your hard drive space. It also provides you with tools and dashboards that improve your access to management information, financial reporting, forecasting and projections, performance tracking and more.

3. Use the latest in expense management tools

Expense management can be a time-consuming and tedious job. But it’s also a vital task that helps you ensure you’re spending company money wisely and not overspending. If employees start going over their budget limits, this can be a costly mistake for the company and your cashflow.

Expense management tools, such as Soldo, Weel or Pleo, help you manage staff spending by giving employees virtual cards that are linked to a specific budget, account and code. This helps you track their expenses easily and make sure they’re staying within their budgeted limits. These platforms also give you detailed reporting and analytics, so you can see where money is being spent, and where savings can be made.

4. Make it easy to accept digital payments

The problem of slow payment is one of the most frustrating things for small businesses. If your customers don’t pay on time, this can result in a loss of revenue, poor cashflow and an inability to cover your basic costs and overheads. To resolve this issue, many companies have begun to switch to digital payment platforms that make it simpler, faster and easier to collect payment.

Payment platforms, like PayPal, Square or Stripe offer faster payment times and more control over the customer experience. Some platforms even integrate with your cloud accounting, so you get automatic bank reconciliations.

5. Embrace the latest in digital reporting and forecasting

With digital accounting changing so rapidly in recent years, there’s never been a better time to embrace the benefits of the latest in digital reporting and forecasting.

Economic conditions are hard to predict. So it’s crucial to be able to quickly analyse data, check your performance and make predictions about how your company will fare in the coming months. When you use cloud solutions for financial reporting and key metrics, you’ll be able to monitor trends in real-time while having access to the data anytime, anywhere.

Having this information at your fingertips helps you make informed decisions faster than ever before – and that translates that into more sales, increased business growth and bigger profits.

Talk to us about updating your financial systems

If you’re looking to give your finances a touch of digital magic, please do come and talk to us.

We can walk you through the best cloud platforms, fintech apps and business tools to add to your app stack – so you’re ready to make the most of a digital approach to your finances

Get in touch to supercharge your finances.

Plain English Guide to Cashflow

Why is cashflow so central to good financial management? Here’s our plain english guide.

What is cashflow?

Cashflow refers to the movement of money into and out of your business over a specific period.

In the most basic terms, cashflow is the process of cash moving out of the business (cash outflows), and cash coming into the business (cash inflows). The ideal scenario is to be in a ‘positive cashflow position’. This means that your inflows outweigh your outflows – i.e. that more cash is coming into the business than is going out.

When you’re cashflow positive, the main benefit is that you have the liquid cash available to fund your daily operations and debt payments etc.

On the flip side, if you’re in a negative cashflow position, this can be a red flag that the business is facing some financial challenges – and that some serious cost-cutting and/or revenue generation is needed.

When you’re cashflow positive, the main benefit is that you have the liquid cash available to fund your daily operations and debt payments etc.

How does cashflow affect your business?

Not having enough liquid cash is one of the biggest reasons for companies failing. So it’s absolutely vital that you keep on top of your company’s cashflow position.

Five key cashflow areas to focus on will include:

- Monitoring your cash inflows and outflows – this means regularly tracking your cash inflows from sales, loans and investments, as well as managing your cash outflows from expenses, purchases and debt repayments.
- Managing your account receivables and payables – efficiently managing your customer receipts and supplier payments helps smooth out your inflows and outflows – and delivers stable cashflow that’s easier to predict and manage.
- Getting proactive with your budgeting and forecasting – creating realistic cashflow budgets and forecasts helps you predict your future cash position. By anticipating your future cash needs, you can actively plan for potential shortfalls or surpluses.
- Being in control of your stock inventory – having excess stock in your warehouse ties up cash. So, it’s a good idea to optimise your inventory levels and to only manufacture/order the items you need on a day-to-day basis.
- Investing in your cash reserves – with emergency cash reserves in the bank, you know you have the funds to handle unforeseen cashflow issues or sustain your operations during lean periods. This makes your whole cashflow position more stable.

How can our firm help you with cashflow management?

Positive cashflow is the beating heart of your business. Working with a good adviser helps you keep that cashflow healthy, stable and driving your key goals as a company.

We’ll help you keep accurate records, track your inflows and outflows and deliver the best possible cashflow position for the business.

Get in touch to chat about improving your cashflow.

The following content was originally published by BOMA, and is updated for freshness, accuracy and comprehensiveness.