One of the most crucial areas for a business is its financials, and as a business leader it’s essential that you keep a keen eye on the financial pulse of your organization. Year-end presents the perfect opportunity to review your financial data over a longer period of time, and this analysis will become the compass to guide you toward strategic decisions for the following year.
In our last article, we discussed the basics of formulating a year-end strategy. Now, let’s cover some guiding questions around financials to help drive next year’s goals.
Do You Have Actionable Data?
Your business generates heaps of data on a daily basis, so it’s crucial to be able to zero in on that data to draw the insights and analytics you need to make informed business decisions. Tracking and analyzing your financial data should be a routine part of running your business. That way, come year-end, you have the insights you need to assist with financial planning, budgeting and forecasting for the new year. If your business hasn’t previously put a focus on financial analytics, you may want to consider investing in the right technology to make it easier for you to proactively pull the insights and reports you need to get results. Check out our operations and analytics webinar, where our team will cover how your business can level up your data and reporting processes.
Are You Growing?
Did your business experience growth in the past year? Whether or not you’re hitting your revenue numbers will play a significant role in how you use year-end to strategize for your business. If you aren’t growing, it’s time to dig deeper and evaluate what processes or services aren’t making the cut. If you’re crushing your numbers and expanding, you’ll instead want to determine if your current financial processes are built to scale. While business growth is always exciting, it can often bring new challenges — especially when it comes to managing financials due to higher volumes of transactions, complex reporting and increased compliance requirements.
Did You Stay on Budget?
A key part of hitting your numbers is if your business’s budget is on track or in the red. Assessing where your budget stands should always be part of your year-end planning so that you can set spending expectations for the year ahead. If you know you have a big software upgrade or business investment coming up, be sure your budget reflects those needs and funds are allocated where they should be to achieve your business’s goals. With your budget, you should also review your business’s cash flow and determine whether it’s positive or negative. According to research done by U.S. Bank, 82% of businesses fail due to poor cash flow management. Don’t let your business be a statistic. Monitor your spending, dig into your numbers and make necessary adjustments during year-end to set your business up for success.
Review With Intent and Gain Clarity
Looking over financials during year-end may seem like a no-brainer, but if you aren’t reviewing the right items or spending enough time, you may be doing your business a disservice. At the end of the day, a business’s financials weigh heavily on whether it will thrive in the long run, so it deserves your utmost attention and focus.
This planning season, review your financials with intent and gain clarity on your business’s overall financial health to develop strategies that will drive your business forward into the future. If you’re looking for additional guidance on how to get intentional during planning season, Creative Planning Business Services is here for you. We offer an exclusive Intentional Growth program designed for business owners to gain the insights and resources needed to create sustained value for their business. Learn more about the program here.
In our next Countdown to 2024 article, we’re covering the perfect sequel to finances and a common headache for many business owners: taxes and tax-planning strategies.