You’ve already achieved the first step, the one that seemed so difficult and distant when you were thinking about starting this adventure. And today your business is up and running. You may have even entered a new growth phase thanks to different financing options.
But… is your company working as it should? Is it necessary to wait until the end of the year and depend exclusively on an accountant to know if everything is going well?
The first step: getting organized and understanding your financial statements
Everything starts with having clear numbers. The foundation for understanding the health of your SME lies in the financial statements. Keeping your accounts up to date not only allows you to know how your SME performed in a given period, but also reveals information that, at first glance, is not always so evident.
- Balance sheet: shows you how your assets are behaving, how they relate to your liabilities, and what impact they have on your company’s net worth.
- Profit and loss statement (P&L): helps you understand whether your operational and financial decisions are generating profits or losses during the analyzed period.
- Cash flow: allows you to visualize the actual movement of money. The P&L may indicate profits, but if cash flow is negative, you could have difficulties paying on time.
Although the formats may be simple, this information is vital. It serves as a foundation for identifying financial indicators that will help you see beyond the raw numbers. These offer you vision, anticipation, and reaction capacity.
The best thing about having these statements properly maintained is that it will allow you to recognize ratios and indicators that will give you a vision of your company’s status even during operations and not just at the end of the period.
If you want to know in more detail whether your startup is working, don’t hesitate to contact the Economic Office through the following form.
