Tracking your Sales and Expenses for the purpose of calculating your GST Obligations is not only a legislative requirement, but it can also be done in a way that gives you the tools to analyse your business.
Use this information to:
- Produce budgets and cash flow forecasts
- Know where your business is at
- Maintain budgets and plan your cash flow
Understanding budgets and cashflows
While Budgets and Cash flows are similar, they each serve a different purpose.
Budget
A budget is a prediction of future earnings and expenses for a given period of time, and focuses on the profits of a business.
It's an invaluable tool to help you prioritise your spending and manage your money.
Cashflow
Some of the biggest financial burdens facing businesses is often the Quarterly GST, Super and PAYG Bills. Many banks offer higher interest on “Online Accounts”, accounts that you can “PARK” your GST, Super and PAYG obligations on a weekly basis, helping to alleviate that large requirement which often strangles cash flow. The added benefit is that you get to earn interest on the GOVERNMENT'S money until your obligations are due.
Cash flow forecast
A forecast of the movement of available funds. A Cash flow forecast includes not only the Sales Receipts and Payments of a business, but also takes into account Loan and Lease Repayments, payment of Liabilities (Creditors, BAS and Super), etc. Forecasting helps you to identify potential shortfalls in cash balance and foresee potential problems before they occur.
Business Plan
Business Plans are not just for the purpose of gaining start up funds, they are also important for Business Continuity. Business Plans can also be a great reference source, at the end of a period of time they can be compared to current position. The business plan can then be revised or modified according to market trends, economic climate or opposition influences. Just take care, even if your business achieved your goals, don’t relax, keep planning.
Planning for your business
Know Your Customers
Who are your top 10 customers, it might surprise you that the customer that takes up most of your time may not actually be your greatest income source. Of your top 10 Customers what are their average days to pay.
Which Product has the Greatest Turnover
Of the products you sell which have the greatest turnover and generate the highest return?
We can help you track and analyse your business, and plan to succeed. Make it your business to know where your money is going and when.