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By Bill Jones, Fractional CFO and CPAIf you are like a lot of businesses you just spent a considerable amount of time inputting data, reconciling accounts and taking other steps necessary to file a tax return or at least make an estimated payment and extended the return. You may be relieved that is over or surprised at the results, but now that it is over what should you do now?
This is a great opportunity to evaluate the past year and focus on the year ahead. The financial statements you prepared told a story about what happened in the past. Ratio analysis and a little research will at a minimum tell you how you compare to your competition. Further interpretation of specific ratios and trends can answer questions about the future including ideal inventory levels, when you can expect to cash collections, whether you can meet future obligations timely and when to hire the next employee, just to name a few.
It is a perfect time to identify metrics that you wish you knew and establish systems to track the relevant information going forward to continue to provide better insight in managing your business.
Also consider the current legal and tax structure of your business:
Other things to consider:
Whether it is the questions above or others based on your own priorities and values, my message is that it is important to continuously look at your business, both historically and prospectively, with objectivity and make changes as necessary. Business big and small are impacted everyday by the constantly changing business environment. Those that proactively adapt and change will thrive.
William F. Jones, Jr. CPA, CGMA (Bill) and the team at Jones & Associates, P.C. have over 28 years of experience helping companies and their owners through a wide range of business and financial issues. Bill is also more than happy to discuss the best trails to run or cycling routes in Boulder and the Colorado front range. He can be reached at firstname.lastname@example.org or directly at 720.506.5337.