Is your financial reporting the key to funding success?
All businesses have to prepare financial reports and summaries, but many don’t use them to their full advantage. Could your financial reporting be the key to unlocking more funding and opportunities for growth?
When it comes to reporting, almost all businesses will at least have an income statement, cash flow statement and balance sheet. However, for a lot of companies, preparing these reports can be more of a box ticking activity than a valuable exercise that can shape the way the company moves forward.
Aside from glancing over your statements when you have to make a big financial decision or sitting down once a year to examine the state of your finances, what other steps can you take to get more from your financial reporting?
Here are three ways that you can unlock the hidden value from your financial reporting.
Keep your financial statements up to date
This may seem obvious, but all too often when financial reporting is just seen as a routine activity, it can fall behind what are deemed to be more important and valuable tasks.
This can become an issue in particular for small businesses, especially when their finances and accounts are managed by someone who has split responsibilities.
However, even if your reports are out by just a few months, you could be making some of your most important business decisions based on inaccurate data.
Keeping a realistic and accurate view of your company’s financial situation will not only help you make better decisions, it will alert you sooner to any potential issues or gaps in your cash flow.
It will also allow you to make better decisions all round, in areas such as forecasting and investment as well as funding. It can also mean that you’re in a better position to seize growth opportunities that present themselves to you, as you’ll know what you can and can’t afford to do.
Check your credit report regularly
Surprisingly, a large proportion of businesses don’t regularly obtain and check their own credit report.
While some businesses may take the opinion that this is unnecessary as they have more detailed financial data internally, it’s crucial to know what external companies see when they research your business.
Routinely checking it is important to gain a good reflection on your circumstances. Obtaining a copy of the report is quick and easy to do and can give you a good indication of your overall health and improve your chances of accessing finance at the right time.
If you do get your credit report and notice that your score is lower than expected, addressing it as soon as possible will be crucial to your future financial opportunities.
If it is lower than you would like, five steps you can take to improve it are:
- Pay all your invoices on time
- File annual returns and financial accounts on time
- Avoid CCJs wherever possible and, if you do receive any, settle them within a month
- Keep an eye on your personal finance, as directors’ personal credit history may be taken into account when there is limited company data
- Inform utility suppliers if you move premises and be sure to pay all bills in full
Consult an expert
Another great tip to make the most of your financial reporting is to seek out the support of experts and get further advice and guidance on what your next move should be.
Getting the right advice at the right time can be invaluable, whether from an accountant or a specialist finance broker, such as Hilton-Baird, if you see any upcoming need for funding.
Even if you aren’t currently making any big financial decisions, seeking advice from a financial advisor can help you keep your finances in the best health and uncover new opportunities you may not have been aware of.
If you are looking for support with finding funding or improving your cash flow, you can reach our funding consultants on 0800 9774833 or by emailing firstname.lastname@example.org.