Going over financial statements is nobody's favourite hobby. That is why Chartered Accountants are so well paid.

Going over financial statements is nobody's favourite hobby. That is why Chartered Accountants are so well paid. Most small and medium business owners do not have an in-house accountant to keep track of their daily reports. This results in the statements being overlooked during the year, given attention to, only at year-end filings. While that is a good standard practice, we will talk about the benefits of personally taking interest in your accounts.

Keeping a keen eye on the numbers and figures continuously throughout the year will give you regular insight into your business. It may also help you pinpoint exactly when the dip in sales happened or what added most to your cost.

So, let us take a look at ways to tackle the numbers head-on and emerge a winner.

Profit and Loss

Most people look at their profit and loss ledger at the end of the year and then plan accordingly for the following year. They generally set broad yearly targets for the business. While you should continue doing that, you should also start looking at your statements every month. It will give an insight into the minor profits and losses that get lost in the scope of the yearly report. This monthly insight will help you identify areas to target and where to cut the losses.

Cash Flow

Small to medium companies go into debt because they don't maintain healthy cash flow. Make sure before the end of the current month that you have enough in your accounts to meet at least the next two months of expenses and buy the stock if required, even if you don't make any new earnings. This is a non-negotiable factor for any business to have long term success.

Sales

Everyone makes sales targets and strategies for the year. Here again, the idea is to look at your sales figures at the end of every week. So, from the first week itself, you know how much still needs to be done to achieve the monthly target. This strategy will prevent you from lapsing on your monthly goals and contribute to overall growth.

Price Point

Most small entrepreneurs and start-ups lose money because they have under calculated their product or service price point. It is essential to factor in hidden costs like stationery, refreshment, mobile bills, building utility charges, daily travel expenses, etc. It is pertinent to add every little expense and then put a price tag on your product or service. Only once these expenses are covered in your cost will you see an excellent healthy figure in the profit margin.