Have you ever heard the phrase “Fail to prepare – prepare to fail?” It works just the same in business as in any other area of life. If you have clear, defined goals you are setting out to achieve written down, with a mapped out timescale you can then begin to really work out the smaller steps needed to help you realise that ambition.
One of the tools are our disposal is the use of scenario planning. This is a strategic planning method that some organisations use to make long term goals as it enables them to forecast impact of key financial decisions on their cashflow and profit and can show for example; three salary levels for a new hire to show that negotiations to salary will impact the business differently and will reflect affordability for key decisions.
The way this works is to assess the company cash flow position initially based on current invoices you have raised and are awaiting payment for alongside future invoices raised but not yet due; and the regular recurring supplier invoices, wages and overheads the business already has. This shows if the business is currently working at breakeven level, below or above. This to focus on areas which may need to be improved and is always included as standard within our management accounting function.
For us, this service is integral to our outsourced finance director package to enable growing businesses to stay on top of the numbers within their business. As leading accountants in Suffolk, winning best cloud accountancy practice Suffolk for both 2021 and 2022 we are well placed to assist your business to scale.