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Pennies will drop – Improve your Business Financial Literacy Posted on October 20, 2020

Financial literacy

There’s a direct correlation between a business leadership team’s financial literacy, and business success. Those who can crunch the numbers with technical competency will more easily identify the business strengths and weaknesses that require decisions and actions.

That being said, it is understandable that most business owners are experts in a different field – not in financial management. This amplifies the necessity for accounting software and professional advice: 

  • Accounting software is an absolute necessity of modern business management and will produce real-time and accurate reports. Thanks to advances in technology, businesses are data rich. Financial literacy helps you to create meaning out of the data. It is the ‘so what’ factor.
  • Curate your team to include Chartered Accountants. Meet with them regularly and ask questions. Anything you don’t understand about your reports is a missed business opportunity.

The three reports you need to run, understand and interrogate on a regular basis are:

ReportData Frequency
Cash flow statementBank reconciliation and budget.Weekly
Profit & Loss (P&L)/Income StatementPayment directions – where the money is coming from and going to.Monthly
Balance Sheet or Statement of Financial PositionCompany assets, liabilities, net asset position and equity. This will indicate your financial health. For many business owners, the line between business finances and personal finances is a thin one.Yearly

Financial literacy is not something that can be reserved for the CFO or Accountant, the entire management team needs to be able to interpret financial reports that inform the wider business strategy and leads to aligned and strategic decision-making.

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talk to us Discover the difference that the right advice can make

Get in touch with our team today and learn how you and your business can grow to the next level. From structuring to sustainability, we'll help you reach your financial goals and live the lifestyle you deserve.

be better off.