Here are five essential tasks to help your business stay in top financial health.
1. Bring financial statements up to date
A clear understanding of your company’s current cash flows, revenues, expenses, assets, and liabilities is critical. For example, in an effort to cut expenses, you might prematurely lay off or furlough workers who are, in fact, essential to the continued success of your business.
2. Create a forecast
After getting a solid grip on current finances, project those numbers by month for the next twelve months. What will revenues and expenses look like in two months? By year end? Of course, the future—especially in light of the current crisis—can seem especially hazy. But as the old saying goes, “Those who fail to plan, plan to fail.”
3. Build a three-scenario sensitivity analysis
Because of the future uncertainty, once you’ve established a baseline forecast, create three different scenarios - a best-case, worst-case and most-likely case scenarios. Then come up with action plans to adjust costs for each scenario.
Don’t leave customers, suppliers, creditors, and employees in the dark. Communicate with your community frequently. If workers, managers, suppliers and others don’t know what you’re thinking, they may develop erroneous conclusions about the direction of your business. In time, such misunderstandings can lead to unanticipated staff turnover, irritated customers, costly disputes with vendors, and other problems that may take years to correct. Even if the news is uniformly bad, talk to them.
5. Stay in touch with advisors
Attorneys, accountants, insurance brokers, lenders—all these experts can provide independent help to you and your business. Advisors with a fresh set of eyes can analyze your company and offer insights into what their other clients are doing to survive an economic downturn. Even better, they are often best positioned to share perspectives about recently-enacted tax law provisions targeting small businesses.
With proper planning, your business can maintain a healthy fiscal outlook.
Last updated: 07/05/2022
Billburg Accounting Inc
Small Business Accounting, Tax and Payroll Specialists
3915 SW 14th Ave | Cape Coral, FL 33914
Phone: 239-540-4433 | Fax: 239-945-4519
The Covid-19 Tax Resource Portal (herein after referred to as "Site") is made available as a service to our clients and others for informational purposes only. These materials and information should not be considered as, or a substitute for, accounting, tax or financial advice. While it is hoped the materials provided here are helpful as background material, it is not warranted either expressly or implied as accurate or complete. You should refrain in taking any action based upon the information provided here until you have received proper counsel.
In addition, you understand that any links to any other web site or services does not constitute endorsement of or warranty of any service, product or information provided on their site(s). These links are provided for convenience only.
While our intent is to make transmissions to and from this web site secure, it is understood that no warranty of security can be made and that unforeseen security breaches by "hackers" is a possibility, however slight.
Reproduction of part or all of the contents on this site in any form is prohibited other than for individual use only. All content on this site is copyright protected and/or trademarked as appropriate and may not be copied, duplicated or altered in any way.
In no event shall Billburg Accounting Inc, its affiliates or suppliers of any content on this site be liable for any indirect, incidental, special, punitive damages or consequential damages of any kind, or any damages whatsoever arising out of or related to your use of the Site, the content and other information obtained therein.
© 2020 - 2023. All Rights Reserved.