The financial plan is an important part of every business. It helps business owners to know if the business will run smoothly and determines its survival according to the estimates made for outgoings and incomings. Professional Melbourne bookkeepers know how to create a blueprint for business finances. It allows business owners to become aware of possible challenges that may come, such as a business might run out of money or debt. In today’s blog, we’ll discuss how a bookkeeper can help you make a financial plan for your business.
What is a Financial Plan?
A financial plan is a document that a bookkeeper prepares for your business to help business owners set financial goals for the short-term as well as long term. Bookkeepers also help in making strategies for achieving those goals. It might be difficult for an unprofessional to make a financial plan because it requires analysis of the financial status of the business and forecasting its future expenses and income depending on past data.
When you choose Melbourne bookkeeping services, you can be sure that a financial plan will be made after considering various factors. The financial plan will help you make informed business decisions. The budget plan helps them spend money wisely and helps them to follow the plan. The plan helps the company to follow the right path to achieve its goals.
How do Bookkeepers in Melbourne Build a Financial Plan?
Professional and experienced bookkeepers can make an accurate budget plan for any business that will consist of the following documents and statements:
- Cash Flow Statement
Prediction of cash flow is important to identify the actual financial status of the company. It is important to forecast cash flow to help businesses know whether their company will be sustainable or not. When you opt for bookkeeper services in Melbourne, then you will be sure that the bookkeeper can easily identify shortfalls in the future and manage the business finances wisely.
- Profit and Loss Statement
The profit and loss statement is the income statement that gives the details of the income made from the expenses and the sales during a year or quarter. The bookkeeper makes an estimation regarding the revenue produced and the expenses of producing the goods. It needs to calculate the net profit and loss in a specified time period to know outgoings and incomings.
- Balance Sheet
The balance sheet gives a list of liabilities and assets. The business owner can get the bottom line of the business when the balance sheet is combined with the income statement and cash flow statement.
- Business Ratios
The bookkeeper is not only responsible for considering numbers. They also look at each aspect very closely to know how the company is performing, such as accounts payable turnover, profit margin, etc. They make use of financial statements to know the return on investment, return on sales, gross margin, current ratio, etc. Furthermore, a small business accountant in Melbourne also plays an important role in the company. Thus, it is important to seek help from accountants when it comes to taxes and accounting matters.
- Sales Forecast
Another important part of bookkeeping for small businesses is predicting the sales for the next quarter and fiscal year. It helps the entrepreneur to know how much money can be produced by the company and how the company will perform. It will be prepared to consider income forecasting to know the company’s financial condition.
- Assets and Liabilities
Assets and liabilities need to keep in mind while producing financial reports. Although the liabilities and assets are an important part of the balance sheet, they need to be considered and tracked by the bookkeeper in Melbourne. The list of assets includes current assets that can be converted into cash quickly and long-term assets that are purchased for long-term use, such as vehicles, real estate, etc.
As a business owner, you need to wear multiple hats to run your business successfully. To effectively run a business, accurate financial planning is a must. Therefore, it is suggested to get help from a professional bookkeeper to make a financial plan for your company. For this, you can also contact Reliable Bookkeeping Services provider.