Lifesaving Properties of a Balance Sheet
Here’s Bob. Isn’t he cute. What a great life he’s got swimming around in tropical waters enjoying life…or has he?
Now look at the bigger picture… do you still think Bob’s got a great life?
Just looking at the ‘Profit and Loss’ statement in your business is a bit like looking at Bob here and ignoring the ocean or what we in the trade like to call the ‘balance sheet’.
All manner of sharks can lurk in the depths of your balance sheet and it’s up to you, the captain of the ship or business owner, to understand them and take action when necessary.
Possible Sharks hiding in your balance sheet might be:
• Insufficient cashflow
• Unaffordable liabilities
• Uncollectable debts
• Slow moving or obsolete stock
• Old festering assets not making any value
• Looming issues
The accounts pack for your business is like every good piece of safety equipment.
The material used to create them must be high quality and suitable for the job.
They should be inspected regularly and maintained by a professional
And most importantly faults and discrepancies need to be investigated and resolved.
Undetected sharks or ‘issues on your balance sheet’ leave your business at risk. Frequently eating into profits, or leaving you nervous about dipping your toes into new opportunities.
So next time you’re handed your accounts pack don’t dive straight into the Profit and Loss section because you might miss a vital chunk of information that could leave your business high and dry.
Have a snorkel around the crystal clear waters of the balance sheet and keep an eye out for those sharks.
If you need help understanding your balance sheet give us a call.