It is the duty of the management of a company to keep track of the financial health of the company. starting a business may look like a monumental task but keeping the business alive and well is a much harder task. The management should keep a close watch on the business activities so that it is able to establish a benchmark to monitor the financial growth of the company.
Tracking the growth of the company has its own merits. It can tell the management of the company if the company is moving I the decided path or needs to get some external help. This makes for a very handy and useful tool to actually determine a strategy for the future of the company.
Let’s discuss some of the ways through which the management can track the financial growth of a company.
Ways to Monitor Financial Growth of a Company
Here are some of the tried and tested methods of keeping track of your business.
1.Prepare the financial statements of the Business
The preparation of the important financial statements such as Profit and Loss Account, Income Statement, and Balance Sheet will ensure that all the business activities of the company ae being tracked and analyzed. These financial statements will also provide us with a benchmark that will help both the management as well as the potential investors if they should invest in a particular company or not.
2.Keep track of the Inventory ordered and used
Keeping track of the inventory and Raw Materials used will help create a benchmark of how much inventory was ordered and how much was used. This will reduce the costs incurred by the business and will also result in avoiding the wastage of the resources and raw materials. This report will also notify the management when should it order for the raw materials.
3.Find all the Financial Ratios of the Company periodically
The teams handling the financial aspect of the company must prepare a list of all the financial ratios of the company to get an exact picture of the financial health of the company. The management should know what assets and liabilities are in is hand and which ones can be used in cases of emergencies.
4.Analyze all the Overhead Cost
Overhead costs can lead to an unplanned increase in the cost incurred by the business. the management should analyze all the costs and find if these costs can be avoided. Even the removal of a small cost can create a huge difference for the business.
5.Analyze the Marketing Expenses
Marketing expenses include the costs incurred by the businesses in order to advertise their product in the market. If the marketing expenses of a company are steadily increasing and the company is expanding into new territories, then it is fine, but if without expansion the marketing expenditure is increasing, then the management needs to look into the marketing activities.
6.Create Dashboards for Day to Day use
The management can create and us dashboards on a Day to Day Basis. Using the dashboard will provide quick information to the workers, management as well as the potential investors and shareholders. The dashboard should consist of all the necessary financial indicators and would also mention the future trend in the industry.
7.Conduct Analysis of your Competitors
Competitor analysis is very useful for a company in many ways. Constant competitor analysis will let us know about the competitors in the market and their business strategies, which will help the management to prepare a future strategy for the company.
In these seven ways monitoring the financial growth of the company can be hep a company. Accurate reporting and financial analysis are very important to be able to monitor the growth of the company. This is why a company should always avail the services of a reputed and well-known Accounting and Auditing firm for accurate financial analysis.
One such reputed firm in the United Arab Emirates which will help to monitor your business is JAXA Chartered Accountants. JAXA is a reputed firm that aims to provide accurate and reliable information about the company, which can be used to prepare a strategy for the future of the company.
For more information about the services, Contact Us. We will be happy to help.