We’re still battling a global pandemic, and many business owners are struggling to survive with the ongoing entering and exiting of lockdowns. One of the things that can go easily unnoticed at a time like this are your financial records. Not paying attention to your business finances and records at a time of crisis can be very dangerous and detrimental to your business.
At MKS Group, we have outlined 4 reasons why you shouldn’t neglect your financial records.
- It’s a Legal Obligation
As a business owner, you have several legal obligations and most of them don’t change amid a crisis. Keeping your financial records up-to-date is one of them. For example, if your business operates through a company structure, each year you need to provide a solvency resolution that the company is in fact solvent. Keeping proper financial records assists you as a business owner make this assessment on the solvency of the company
- It Will Help You Survive
If you and your business are in survival mode it is vital that your records are up to date. This may be challenging but it will help continue to identify potential issues, and can help survive the pandemic. Your records will allow you to identify the right targets or KPI’s and track your progress.
Your costs, revenues, and profits are critical financial information to help you survive at this time. At MKS Group we can assist you in assessing all of your financial information to make the recovery process smoother and ensure your business survives and thrives post Covid-19. Remember – you need to know your numbers to grow your business.
- It Allows You to See Your Accurate Financial Records
If you don’t have good records, then it will be difficult to prepare accurate financial statements. Your financial statements will help you in the decision-making process to better manage your business. Gathering and recording ongoing information about your business activities will help ensure you have all the details you need to support your decisions, even the ones you have made over the years.
At this time, you may need to make big, important decisions for your business. When you don’t have accurate information to do that, then you could end up making the wrong decisions that can put you and your business at a risk. Important records that need to be up to date can include:
-Profit and Loss statements
– Balance sheets
-Cash flows
-Employment obligations such as superannuation and ATO obligations such as GST and Income Tax
This information may not just assist you and your business, but is also extremely important for banks and lenders if you are seeking additional funding.
- It’s for Business Assets
Aside from the ongoing and day to day transactions of your business, you need to keep detailed information about your business assets. These assets can be your equipment, furniture, property, bank accounts, and more.
Accurate recording of your business assets and good financial records, gives you a clearer view of which assets you need, and which assets may no longer be required or excess assets, that you may be able to sell off to receive needed funds. This can be helpful for you to survive during these trying times.
Conclusion
The last thing you should do during a difficult time for your business is to forget about your financial records. Now is the time to pay close attention to them and ensure you’re managing your books well. By doing so, it will help you get through and even help you survive this crisis.
Are you overwhelmed, feel out of your depth or simply have not enough time? Invest in a good accountant to help outsource this function so you can contrate on the most important operational matters.
At MKS Group, our purpose is to “Inspire, Educate and coach our community, in partnership, to help achieve their financial goals”. It is our business, to know your business so reach out to our team to partner with you on your business journey. Contact us today: 9374 8400 to learn how we can help your business!
