Managing a Business in Times of Recession, part 2

[inHisbalance]

Yesterday we discussed managing the Income Statement. Understandably, this is the main concern of

small businesses because they want to know "how much money have we made?"

Don't make the mistake of not giving the Balance Sheet its proper over-sight.

 

Asset management, cash and receivables particularly, need high attention. Review and manage your accounts

receivable (A/R) daily. Call customers that are past due. There may be a dispute or the call may reveal potential

problems with their ability to pay before you ship again, or it may get them to send a check (hopefully this is the

case.)

 

Review and reconcile your bank accounts daily.

 

Don't allow your accounts payable to get extended and damage vendor relations. However, hang on to your

cash as long as possible, which means daily management and knowing your vendors beyond just stated terms.

 

In tough times, monthly review of Balance Sheet ratios is critical. A/R turns, inventory turns, inventory to sales,

and debt to equity ratio are just some of the ratios that can determine the health or areas of concern for your

business.

 

A well managed small business can often survive recessions better than large companies. However, the small

company needs the tools and expertise to manage successfully. I can give you the tools: comparative statements,

ratio analysis and related consulting to accomplish the operational achievements you want for your company.

Outsourcing your accounting and bookkeeping is possibly a cost-cutting measure for you.

 

I can give you the tools and financial expertise to help your company thrive.

 

 

Thanks,

 

Jim

 

 

"The Paulding Financial Graybeard"

 

 

 

Let's start a discussion on managing small businesses through difficult times.