A study by the UTS Sydney, 44% of small business failure can be grouped under financial mismanagement and inadequate records so it is vital you have some knowledge of the financial state of your business.

We have developed an e-book “How to understand the financial accounts” to take you behind the numbers and teach you some things even some accountants don’t even know.

The financial numbers for any business are important but some are more meaningful than others and we show you the ones that must be focussed on the most. In addition, we’ll see it is the relationships of certain measurements to each other that reveal most about how a business is performing in certain areas.

We look at the various components of the profit & loss statement and balance sheet. These two documents can then be used to analyse the financial results, developing meaningful ratios that get behind just the numbers to let you know what’s really going on in your business.

We show you how to prepare a source and application of funds statement – an invaluable document to show you clearly where monies have come from and gone to in a particular period.

Finally, we show you how to calculate your break-even point and margin of safety – critical numbers to know, particularly if your business is just starting out or developing a new product line.

Just as important as understanding the financials is having and monitoring a profit budget and cashflow forecast. A well thought out budget is a vital part of any business and business plan.  A budget provides 2 main objectives:

• it provides a “blueprint” against which to measure actual performance;
• by setting targets they provide a focus for the business in financial terms for a future.

Our e-template “How to develop a profit budget and cashflow forecast” provides you with a ready to go format to create a meaningful profit budget in a very short time.

As it is created in Microsoft excel it obviously has a great deal of flexibility, allowing amongst other things for you to insert actual results against budget to easily see if you are on track from month to month and year to date.

It then extends into a forecast of cash inflows and outflows which is critical to manage your bank balance and finance requirements. It caters for GST, non-cash items such as depreciation and various Commonwealth and State taxes allowing you to see the bigger picture of how the projected financial performance of your business effects the bank position throughout the year ahead.