Succeeding in a business is all about getting the numbers right. If you struggled with math in school, the idea of making a realistic projection for future finances can seem daunting. Luckily, you can use this guide from PosterGirl Marketing to master the basics of financial projections.
How Can You Get the Numbers Right?
While financial matters can be tough to understand, this accounting software solution is a great place to start. Next, consider taking the time to educate yourself on how to handle your finances confidently. A Master of Business Administration (MBA) equips you to understand business administration and investment management. Your improved financial skills and business sense grant you confidence and a higher level of authority, especially as your business grows and you partner with other entrepreneurs.
As you project for an upcoming month, quarter or year, examine the market trends and industry performance. Look to your past to determine your performance indicators. Assess your expenses and factor those into your upcoming budget projections. Since you can't avoid emergencies, budget an extra 15% for expenses as a cushion to prevent coming up short.
What Can Help You Fine-Tune Your Projections?
Many software programs simplify complicated accounting calculations. Quicken is a longtime favorite of small business owners, known for its user-friendly interface. Advanced options, such as Adaptive Insights, integrate well with Salesforce CRM and the Microsoft Office suite to help you generate captivating presentations.
Accounting software helps you create several accounting documents:
The balance sheet compiles your shareholder equity, assets, and liabilities.
A compilation of key financial ratios with calculators that contains an explanation of 20+ balance sheets or financial ratios with calculators. A practical approach for measuring the financial ratios with real-time calculators.
The income statement tabulates income and expenditures in a given time to show whether the business is profiting or losing money.
The cash flow statement measures the cash entering and leaving the firm.
Maybe you find a hidden talent after digging into the weeds and seeing how accurate projections can advance your company. Math can become fun when it involves making money! It's not too late to go for an online accounting degree. The training further improves your business skills and instructs you in financial documents, accounting, and achieving realistic projections.
Do You Really Need To Do All This Work?
New businesses have a poor survival rate. While anyone can blame a premature closure on a bear market, many firms thrive in hard times. The difference is proper planning with tools like great financial projections to weather economic storms.
While everyone dreads tax time, you lessen the burden by consistently factoring your federal tax liability into your budget. Without a solid projection, your payment can take you off guard. If you're late on payments, you can get slapped with fines in addition to your tax.
Most states have income tax as well. Some states expect you to file an annual report with business taxes to remain compliant. Missing a step leads to penalties, and your business license could be suspended.
Finally, you can't run a successful business by accident. Without accurate projections, you are prone to more mistakes. You also can miss out on great opportunities when you fail to create sound projection predictions. For instance, lenders request a realistic financial projection before approving a loan. Savvy business partners and investors want to see reasonable projections before linking with a firm.
A little extra education and helpful tools can assist you in making accurate financial projections. Work diligently so you can boost your business to the next level!
At PosterGirl Marketing each client is unique. This is why we create strategies tailored to the needs of each business. Reach out and we’ll help you get your brand exactly where it needs to be — ahead of the rest.
Image via Pexels