The Importance of Financial Statements
Sometimes all a business needs to get to the next level are good financial statements. A business owner can be surprised at what their financial statements reveal. Do you know exactly what inventory item you spend the most on? Do you know what product or service brings you the most revenue? Your financial statements can teach you what buying patterns need to be changed. They can teach you what product or service is working best for you and then you can devise a plan to promote it more. You can learn what aspects of your business you can leverage.
Are you aware of all of your expense items? Did you purchase a service with a revolving payment years ago that you aren’t even aware that you’re still paying for? You can eliminate what you don’t need and what is no longer working for you. Financial statements can make you aware of trends on buying patterns. Are sales always low in January? You can be prepared for the low months but you can also determine a plan to try to increase sales in the routinely low months.
You can’t fix what you don’t know.