Profit First Bookkeeping - A Simple Guide to Checking Your Business Finances

Profit First Bookkeeping Expense Analysis

Running a business is exciting, like preparing for a space mission. You've got big goals, and to reach them, you need to make sure your financial 'rocket' is ready to go. Let's walk through how we use Profit First Bookkeeping to check your finances in a clear and straightforward way.

Step 1: Gather Your Tools

First, collect all your financial statements—like bank statements and receipts—from the past few months. These documents are your mission logs, showing where your money has been going and coming from.

Step 2: Sort Your Spending

Next, let’s organise your spending into categories. This is like sorting your supplies for the journey:

- Operational Costs: These are everyday expenses that keep your business running, such as utilities and supplies.

- Payroll: What you pay your team.

- Income: The money you earn from selling products or services.

This helps you see what's consuming most of your resources and where you might save some cash.

Step 3: Review Your Income and Expenses

Now, compare your total income to your expenses. This step checks whether you're making enough money to cover all your costs and possibly save some for future projects or emergencies.

Step 4: Assess Financial Health

Evaluate important numbers that show how healthy your business is, like how much cash you have on hand compared to your debts. This tells you if your business can handle unexpected bumps on the trip.

Step 5: Set Clear Goals

Think about what you want to achieve next in your business. Do you want to expand, save more, or maybe increase marketing? Setting clear goals is like choosing your next destination in space.

Step 6: Make a Budget

With your goals in mind, create a budget. This budget acts like a map, guiding your spending to help you reach your goals efficiently without wasting resources.

Step 7: Start Your Mission and Adjust as Needed

With everything in place, start following your budget. Keep an eye on your financial statements to make sure you're on track. Just like a spaceship pilot, be ready to adjust your course if things change.

That’s it!! Checking your business finances regularly is essential. It helps ensure that your business can continue to grow and meet its goals, just like a well-planned space mission. You're the captain of this ship, and with careful planning and regular checks, you'll be set for success.

Ready to get your finances in order? With the end of the financial year approaching, now is the perfect time to start. Conducting a financial review now will help you understand your business better, plan for the next year, and ensure you're on the right path. Don't wait—blast off into your financial review today, and if you need guidance, I'm here to help navigate!

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