Key Indicators for Business Health

Key indicators for business health

Do you regularly check key monitors of your business’s health or do you react to information down the track? Use these tips to keep your business running smoothly.

Monitor cash monthly on a short and long-term basis. Cash is an important indication that your business is performing effectively.

Ensure your financial reports work to give you information and react to changes as they happen. Review monthly reports each time you prepare your GST returns.

Divide annual overheads by 12 months to see at what point each month you break even and begin to make a profit.

Put effort into maximizing margins. Ensure you have monthly reports available that enable you to implement improvements.

Stock levels are a key component when obtaining accurate financial results. If stock levels are too high, beware, cash runs out.

Follow up debtors and review the days outstanding. Pay creditors on line, use the time saved to concentrate your efforts elsewhere.

Use your software to compare results to budgets. Plan and think ahead, don’t get stuck in the here and now.

When you find a good employee, look after them and listen to their ideas.

Ask your customers what they want. What is your point of difference? Go out and market your business emphasizing these strengths.

Keep good relationships with suppliers. Reap the benefits of discounts and extended payment terms.

Communicate with your bank manager and professional advisers by e-mail and use direct dial.

You will benefit in the long run.

  1/10 Heather Street, PO Box 37447 Parnell. Ph: (09)3793974 Fax: (09) 3034219
Email: office@sothertonsak.co.nz Web: www.sothertonsak.co.nz