Your Monthly Financial Review: 8 Takeaways Your Accountant Will Make
If you’re running a business, you’re probably juggling a dozen priorities at once. Of these priorities, monthly financial reviews are probably near the bottom of the list. But as tedious as they can be, skipping these regular check-ins could cost you a lot more than you think. Monthly financial reviews are one of the best tools for telling you where your business stands, helping you spot issues before they become real problems in addition to opportunities before these slip away entirely.
For business operators in Dunedin, NZ, these reviews take on even more weight. Many important business sectors in the region are highly seasonal, particularly those related to agriculture, tourism, and hospitality. Since these are some of the biggest games in town, anything that affects these tends to affect everything else. Add the remote region’s supply chain quirks, and keeping your business financially sound can be tricky.
Hiring an accountant Dunedin businesses depend on is a good strategy, not just for helping you crunch numbers but for navigating the ups and downs of everyday operations. Here are eight important takeaways that your accountant will probably pull from your monthly review:
1) Your Cash Flow Position
If you’re interested in getting loans or future investments, keeping your cash flow strong should be a top priority. Your accountant will look at how cash is moving in and out, where any bottlenecks might be, and how long your reserves could last if income slowed. They can also highlight trends impacting your cash flow position and suggest tweaks to keep the cash coming in smoothly.
2) Reasons Behind Your Profit (or Loss)
A profitable month always feels good. But if you don’t know why it happened, there may be fewer of them coming in the future. An accountant can help you uncover or confirm the causes of the month’s successes and failures, cutting away at the fluff to give you the unbiased insights you need in order to stay profitable.
3) Your Stated Budget vs. Reality
Even the best-laid budgets are seldom accurate to the last dollar. Each month, your accountant will help you compare your actual figures against your latest forecast and help you make sense of what caused the gaps. This can transform your understanding of your business, giving you a much better idea of what you might need to do going forward.
4) Your Debtors and Creditors
It’s surprisingly easy to lose track of who owes you and who you owe. Still, keeping on top of payments and collections is vital for both your credibility and business continuity. Your accountant will track aged debtors and creditors and flag any overdue accounts with advice on your necessary next steps.
5) Upcoming Tax Bills
Having a qualified accountant take charge of your monthly financial reports means no nasty surprises when it comes to taxes. Your accountant will estimate your GST, PAYE, and other provisional tax obligations based on your latest results so you’re never caught off guard. If needed, they’ll also help you plan payments so that your cash flow is better able to keep pace with your taxes and other expenses.
6) Issues in Inventory Levels and Turnover
Your accountant will review your stock turnover rates, possibly highlighting slow-moving product lines and other sources of cash tied up in inventory. This can mean fewer write-offs, always-optimal inventory sizes, and more cash available to spend and reinvest in the business.
7) Best Ways to Approach Big Purchases
Thinking of buying new equipment or investing in a big upgrade? Your accountant can help you accurately weigh the financial pros and cons, not just upfront but over the lifetime of the purchase. They’ll also assess your current position, run the numbers on financing options, and ensure that your acquisition doesn’t cause serious cash flow issues down the line.
8) Subtle Warning Signs of Serious Problems
Even when you have all the numbers, common challenges like rising debt, sales shrinking out of season, and over-reliance on a few customers are not always easy to spot without the right experience. Unless you’ve spent many years managing your business or are an accountant yourself, you might not be able to extract all the needed insights from your monthly data.
Experienced accountants can do much more than flag obvious problems; they’ll also be able to tip you off to subtle indicators of potentially serious issues and guide you through what the numbers truly mean early on. This will give you time to pivot, adjust, and do whatever else it will take to protect the business you’ve worked so hard to build.
Let a Qualified Accountant Take the Lead on Your Monthly Financial Reviews
Setting up accurate and meaningful monthly financial reviews today will make it far easier to keep your business running as it should in the future. With a qualified accountant taking the lead on these reports, you’ll develop a smarter, more responsive business. Reach out to a trusted Dunedin accountant to make your monthly financial reviews a real part of your business’s success.