Accounting For Your Cash
By Kerry King | Prudent Partners Consulting Pty., Ltd.

Hello everyone, I was delighted when Tom Boyles invited me to put pen to paper on my favourite subject, the financial management aspects of running a small business. I've written numerous articles and made as many presentations to both the accounting profession and to owners and managers of small business on this and other subjects.

Unfortunately, as much as people agree with what was written or presented to them the same old habits perpetuate (i.e.; no regular business monitoring and analysis of either the financial performance or the financial position of the business). The result is that the business continues to have mediocre financial performance and the owner continues to miss the financial rewards that can come from being in business. Now I know you're probably thinking, something like "who can understand all of those confusing figures and how will having them help get what it is that I'm after?" This is fair comment, but if they are presented to you in a simple format and convey only the most relevant information, I guarantee you'll change your mind.

Let's say we call this simple format report a ‘Business Monitor'. It will only be one page so that's not too complicated and it has six ‘snapshots' of the most important information needed to manage your business more effectively.

Here is a list of titles we can use for each of the six ‘snapshots' broken into two groups being ‘Financial Performance' (how effective we are in generating profit in our business) and ‘Financial Position (how effective we are in building financial strength within our business): Financial Performance and Financial Position. Are you with me so far? OK, now we have the format in place, let's look at what information will be needed for each snapshot heading.

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