Growing Your Business

Frequent Business Checkups

by
Bob Mason
on
8/8/2016
Frequent Business Checkups

Going to the dentist for a checkup every six months is one of the most important ways to properly maintain your teeth and reduce the cost of expensive (and painful) fillings and root canals. By finding out about problems before they become a crisis, you're able to save time and money while also significantly reducing unnecessary hardship.

Maintaining the health of your business' accounting works in a similar way. If you wait for a problem to become a crisis, it's already too late. Instead, you should maintain your accounting throughout the year with regular checkups. That way, you'll prevent potential problems from becoming massive issues unnecessarily.

What you should look for during business checkups

Every business is different, so there isn't one overarching answer to this question. That being said, there are some metrics most businesses can look at that will have a significantly positive impact.

The first step should be to determine which of your financial Key Performance Indicators, or KPIs, are most important to check up on. Create benchmarks for what is considered "good," "bad" and "acceptable" performance for those KPIs, and track them over time in your regular business checkups.

Another important part of a business checkup is analyzing your company's cash flow management, and forecasting projections for the upcoming quarter and year. Ideally, you'll be able to see problems well before they grow into a major issue by checking up on these critical measurements throughout the year. By speaking with your accounting team, you'll be able to better identify areas of your balance sheet that might need extra attention in the months to come.

Finally, you can use your regular business checkups to identify the best performing elements of your business. Depending on the industry you are in, this can include everything from identifying which of your clients are the most profitable, to determining which products are selling best in the various channels, demographics or under specific strategies. By identifying these high performers early, you can emphasize them and provide them with additional resources—which should ultimately lead to a higher profit margin for your company.

Establishing a regular business checkup

Just like a dental checkup, a business checkup needs to be scheduled well in advance so that all relevant parties can be available when the date arrives. Working with an accounting team and giving them a schedule to work with can make the checkups just another part of your company's protocols, like filing taxes or payroll.

If you'd like to learn more about how business checkups can be beneficial for your business, or if you'd like general information about our accounting services, we encourage you to contact us at (831) 288-3784.

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Bob Mason

Bob Mason

Bob Mason is the founder of Coast Financial Services Inc. servicing both the Santa Cruz, and San Jose areas. Bob Mason is a skilled financial professional who is fully equipped to assist any of your accounting needs. Founding his firm in Santa Cruz, Bob understands the importance of small businesses and how they form the backbone of the area. Coast Financial Services, Inc. has been dedicated to the growth and profitability of businesses in Santa Cruz for 17 years. To learn more about Bob Mason and the rest of his team, visit their website.

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