Income tax return deadlines are often the catalyst to organize, summarize and review financial information. I understand. Once your business is established and running well, you may be inclined to let things continue to run as they are. It’s easy to focus only on the day-to-day operations and, before you know it, it’s tax time again.
I would like to offer something to consider that can help you manage and grow your business. Rather than wait until tax time to prepare your financial information in statement format, throughout the year monitor and review the financial performance of your business.
Why is this important? Think of financial statements as a report card – they tell you how well your business is doing. When compared to financial plans/goals/budget, they enable you to track the financial health of your business. Regular financial analysis will help you identify problems, implement the necessary corrective actions, and improve your operations.