Ensuring Accuracy of Your Financial Statements
I’m Liz Jarvis and today we’re going to be talking about the accuracy of your financial statements. As a Business Owner, if you’re not reading those financial statements, how do you know whether they’re accurate? I know we have some great gut feelings about how our business is going, and perhaps we measure it by the bank account, but, it’s important to understand whether the financial statements are accurate.
I’ve had a few experiences of late, where the financial statements were quite inaccurate. In fact, sometimes people manipulate those financial statements to meet the targets that are set for them, or to meet the budgets they set for themselves, or to keep the Bank Manager happy, perhaps.
So, taking an interest in your financial statements is essential to being certain that your business is running the way that you think it is. Ways to make sure that the accounts are accurate, is first of all, to approach those financial statements as the business story. The story book of the business, the profit and loss is the story of your business from one point in time to another.
So that might be a year or a quarter or a month. And then the balance sheet is a snapshot of your business, at a point in time. The balance sheet is often ignored and it’s in the balance sheet that fudges hide. And inaccuracies hide. And incomplete things happen. But it is, as I said, often ignored. And it is important for you to look at the balance sheet of your business, your entity, or you may have multiple entities.
Don’t just ignore it and accept that it’s right, because the Accountant has done it. Have a good read of it. What’s in there. Is it right? Is it incomplete? There are so many things that I’ve seen pop up over the years, as I’ve worked with clients and always walked them through those financial statements that were missing in one way or another, or were incomplete, impacting their profitability.
So, I hope you’ve enjoyed this little session on accuracy of financial statements. Get your financial statements out now and start to have a look at whether or not you think they’re accurate. And if you’re not sure, or you’d like some non-judgemental help from me, reach out and I’ll do my best to help you.
Have a fantastic day. See you next time.
I’ve found that time and time again, business owners who don’t necessarily feel in control of their finances DO in fact have a strong gut instinct when something isn’t right. Having a clear understanding of some key areas of your finances can help you replace this feeling of general unease with the ability to detect where something is amiss and take action. I believe every Small Business Owner has the ability to check their own Balance Sheet for accuracy. Ideally, it shows the Big Picture of your business’s financial position at the chosen point of time. It’s the tool you use to be sure your accounts are in balance. You can save heaps of time and money by checking a few key things! This video will give you some insight and if you’d like some further support or guidance.
