Financial Checklist for CEOs

Staying on top of the company’s numbers is one of the essential duties of a CEO. The financial statements give insight into how well the company is doing on all fronts and how it is achieving its goals. It is essential that all the numbers are accurate for these reports to be of any use at all. In order for any CEO to know that they are looking at the right data, hiring a bookkeeping firm is essential. Once that accuracy is assured, here is what you should review every month.

Review your strategy

Monitoring how the company follows its short- and long-term strategies is the first step. Data is useless if it doesn’t tell the story of how the company is meeting its goals, so every action a company takes should have a purpose.

These are the key points to consider in the strategy review:

• How does the company plan to achieve its long-term goals?
• Did anything change, or are there plans for change?
• During the month prior, did the company accomplish each of its short-term goals or make progress toward them?
• Are its short-term goals progressing towards its long-term goals?
• How efficiently are resources being allocated?
• Are sufficient investments being made in areas that help achieve goals faster?
• Is there too much investment in areas that aren’t contributing to the company’s advancement or have less impact than underfunded ones?

Review your statement of income

• An income statement’s bottom line is one of the most critical measures of a company’s profitability. Gaining greater profits in the future can be achieved by taking on additional expenses now.
• You need to know both your net profit and why it is what it is. Ask yourself the following questions:
• How profitable has the company been for the month, quarter, and year?
• Has the company adhered to its budget?
• Is there anything that can be done to improve profitability?
• In what ways does the company meet its short- and long-term goals best?

Review your balance sheet

Results are reported in the income statement, but the balance sheet better indicates future performance. In addition, healthy balance sheets afford flexibility and open doors for growth, whereas unhealthy balance sheets may force a company to slow growth to survive. Here are a few factors to consider.

Accounts Receivable

• Are all of the company’s accounts being collected?
• Is there any way to make the collection process faster?
• Have bad debts been appropriately accounted for, both from an accounting standpoint and from a cash flow standpoint?
• Are all revenue items being billed to customers correctly?
• Could changing payment terms or credit requirements improve any of the above items?

Accounts Payable

• Has the company paid its bills on time?
• Are there any early payment discounts available to the company?
• Is it possible for the company to preserve cash by extending payment deadlines?
• What are the vendors’ attitudes toward offering more favorable terms?

Accrued Liabilities or Expenses

• What expenses have the company not billed yet?
• Are there any other liabilities that need to be included in the balance sheet?

Working Capital

• Is cash flow is sufficient to meet the company’s needs?
• Are working capital requirements balanced adequately so that the company has enough liquidity without sacrificing growth or investment opportunities?

Review cash flow

All businesses require cash to operate. A company on track to make millions in profit but cannot pay suppliers or rent could go out of business. You may not be able to convert balance sheet assets into cash right away, and taking on debt is not always an option.

Here are some areas to consider:

• Can you afford to make all of the payments on time?
• What is the cause of any cash shortages?
• Are there ways to improve cash flow?
• Do all fixed, variable, and non-operating cash funds need to be accounted for?

Review tracking procedures

Having the correct information is crucial to being able to answer these questions. Bookkeeping doesn’t just mean preparing your financial statements for tax returns at the end of the year. It’s a continuous process that keeps information at your fingertips whenever you need it.

Information should be captured as it happens during your bookkeeping process. You can automate things like sales, receivables, payables, and inventory. Having integrated data systems means pulling together all your information at once rather than requiring different departments to run separate reports.

Halsey Resources helps you to stay on top of your finances

In addition to providing outsourced bookkeeping services, Halsey Resources also include payroll services. Discover how we can help your business reach its goals by contacting us today.