Do you ever ask yourself if your business could perform better?
You’re making profits but are they enough?
Do you feel like you should be making more profit, a greater return that reflects the amount of capital you have invested and the risks you are taking to operate the business?
It’s a good question with shades of grey that will vary for each business owner and the circumstances they face.
Ask yourself;
- Do you make a consistent margin or does it fluctuate month to month?
- Do you experience surprises when the monthly figures are published?
- Are you confident with your cash flow management or seem to be constantly chasing cash to manage the noise?
- Does your chart of accounts set up and reporting tell you what is really going on and in an easy and quick manner?
A finance team is an integral part of the business, helping you forecast what you will need in the future to achieve the results you seek, to help you understand whether you reached those and if you missed them what was the cause. Structure, clarity, and well-directed experience underpin the reliability you can place in your finance team.
Too often cash flow tools are manual and flawed with the result that actual cash flows invariably differ significantly from what you were led to believe. Or they are so basic you simply don’t have any confidence in them beyond a few weeks.
On many occasions, I’ve seen Profit & Loss reports that extend to several pages because of the number of General Ledger codes in the Chart of Accounts set up. For me, that makes it very difficult and time-consuming to interpret the accounts and identify any issues.
On a recent project, the business owners indicated to us several concerns including:
- The reports we receive are slow and invariably inaccurate with responses like we are still working on fixing that. At the end of the day, we feel like we can’t trust the data and the reports
- They had little confidence in the short-term cash flow model, noting the projections beyond a week or two were round numbers and the actual cash needs always seemed to be materially different
- We struggle to get live and real information to allow us to fully understand our business performance and make timely interventions and decisions as quickly as we would like
Working closely with the client, we came up with several solutions including:
- Following a review of their financial reports and chart of accounts, we developed a new structure and framework, one that focused more on the drivers of the business and allowed the owners to quickly understand the real performance and the opportunities for improvement
- We implemented a new, robust cash flow system, including automation, to provide more certainty and confidence in the cash position and the management of working capital needs
At Fountain, we have worked with many businesses to help the owners and executives understand their true performance and identify areas for improvement. This has ensured they can run their business with confidence on a fully informed basis, successfully grow the business, generate more profits and create more wealth for themselves.
If you’re a business owner who would like your business to strive for peak performance, contact Fountain today.
Fountain Consulting and Management, your trusted advisory and management services firm. Offering small and mid-sized businesses access to a team of consultants who are committed and passionate about helping you achieve your goals, create more value and make the best choices for your financial future.
Business strategy, business performance improvement, transformation and turnaround services.