Have you heard the saying, “if you fail to plan, you are planning to fail“? COVID19 is here to prove to us that it’s no cliche! Many are becoming more aware of their financial wellness, and cautious about planning for the future (unforeseen events). Would R10 000, R20 000 have been enough to keep your bakery business amid the national lockdown? It might sound like that’s not a lot, but in difficult economic times/dry seasons, every cent counts.
The first most important step is to set specific short, medium, and long-term financial goals/targets. These goals can include saving up for property, making sure that you are adequately financially provisioned for unforeseen events, and so much more. This process is called financial planning.
A financial plan is obviously different from your financial statements. Here, you make projections for the coming months/years, forecasting income/profits. Hire a qualified and licenced financial planner who will assist you in assessing every aspect of your business finances to help you design and regularly review your financial plan as your business grows.
At Accase Solutions, we offer Financial administrations services, Management Of Cashflow and Budgeting. To get to the bigger goal, you need to hit the smaller targets. Let’s break it down:
Budgeting is simply balancing your expenses with your income, creating a plan to spend your money. This spending plan allows you to determine in advance whether you will have enough money to do the things you need to do or would like to do.
Cash flow management is basically tracking how much money is coming into and out of your business. This helps you predict how much money will be available to your business in the future.
A financial administrator is responsible for managing the accounts receivables and payables of the organization.
…moving right along…
To help you gets started, here are six steps to create your financial plan:
1️⃣ To start off, think about what you want to accomplish and ask yourself… Do I need to expand? Do I need more equipment? Do I need to hire more staff? Do I need other new resources? Most importantly, how will my plan affect my cash flow?
2️⃣ Create monthly financial projections by recording your anticipated income based on sales forecasts and anticipated expenses for labor, supplies, overhead, etc..
3️⃣ Through the year, compare actual results with your projections to see if you’re on target or need to adjust. Monitoring helps you spot financial problems before they get out of hand.
✳ If you don’t have the expertise, consider hiring an expert to help you put together your financial plan.
Accase Solutions is registered with the IAC, Institute of Accounting and Commerce as a Certified Tax Practitioner since registration of Accase Solutions.
Practicing number: PR0100503.
Get in touch with us, a consultant await your call 📲😊