Reviewing the Business Plan
The parameters of budget and all other financial reports are showcased and presented in the business plan. It is important to highlight the important dates in which crucial business activities are to be done. This may include investments to be made to infrastructure etc. which will require financial stability and will increase the productivity of the business. Highlighting these dates in the business plan and reviewing it helps to identify the pace of the business and decide these dates. The daily operations of a business are also included in the business plan. It also shows the financial allocation of the funds to the business operations and activities at present as well as estimates for the immediate and distant future.
Reviewing the business plan helps identify and highlight the pre-planned activities of the business that needs to be done. Minor activities are stated under subsections of financial, marketing and operational action plans where major activities are listed in the objectives section and the objective of the company. To learn more about the business plan writing, entrepreneurs and business students can take help from several Online essay writing services UK, in which highly qualified experts are available to help you make a perfect top-notch business plan.
Keeping up the Records
As the business Grows and time passes, the financial data of previous year can be extremely important in creating budget activities or standards which are used as benchmarks for different performance activities. The previous financial data required should be of budgets, forecast, and variations, cash flows/ profits reports, financial/ operation statements, and reports etc.
The information collected from those reports will enhance the management’s ability to make decisions regarding the control of internal costs as well as for the enhancements of customer and shareholder value which improves the performance and financial status of the company.
Doing a Proper Financial Research
The research process is done through many ways, one of them is management accounting system which helps in making decisions that affect the future. The reports emphasis and compare results to the budgets facilitate financial planning or generate comparison to industry benchmarks.
Financial Records that the Company Must Keep
Below are some of the basic financial records that the law may require a company to keep:
- General ledgers, recording all the company’s transactions and balance (e.g. Revenue, expense, assets, and liabilities) or summarizing transactions and balances detailed in other records.
- Cash records (e.g. bank statements, deposits books, cheques, petty cash records)
- Wages and superannuation records
- A register of property, plant, and equipment showing transactions and balance in relation to individual items
- Inventory records
- Investments records e.g.: contract notes, dividend or interest notice, certificates.
- Tax returns and calculations
- Deeds, contracts, and agreements.
- A company would also normally prepare the following statements:
- Statement of financial performance and financial position
- Statement of cash flows
Cash flow analysis
Cash flow analysis addresses the firm’s cash flow dynamics such as
- How stable is the generation of company’s internal cash?
- How is cash flow of company from its operations?
- If it is negative, why
- Is it because the company is growing
- Is it because its operations are unprofitable
- Or is it having difficulty managing its working capital properly?
- Does the company have the ability to meet its short-term financial obligations?
- Can it continue to meet these obligations without reducing its operations?
- How much cash did the company invest in growth?
- Are these investments consistent with its business strategy?
- Did the company use internal cash flow to finance growth or did it rely on external financing?
- Did the company pay dividends?
- Did the company had to rely on external financing?