Those who are familiar with balance sheet basics know that a company's balance sheet offers a snapshot in time of a company's financial position. You can quickly view a company's cash position, its assets, as well as its short- and long-term debt obligations.
According to Bloomberg Business, 8 out of 10 entrepreneurs who start business fail within the first 18 months. A whopping 80% crash and burn. But most of us already know that statistic don’t we!
So what are the root causes? At surface level the primary reason businesses fail is they simply run out of cash.
Financial reports are not just for compliance purposes. Financial reports are business tools to help you make sound decisions without solely relying on an accountant or bookkeeper.
How your business compares to budget, to previous year’s performance and to other businesses in the same industry.
Simply conversing with your accountant and bank manager about your financial situation on a regular basis and understanding the state of your business, empowers you to make informed decisions and ensuring your long term survival.