5 Financial Variables to Improve your Business or Brand’s Bottom Line


Want to see improvement in your business or brand’s bottom line? Pay attention to your company’s Financial Variables and discuss these influences with a qualified accounting professional to determine if your revenues can be improved, or to learn more.

Five financial variables that can improve your bottom line are:

1) Look at your Profit & Loss Statement  

When was the last time you looked at your Profit and Loss (P&L) statement? This document lays out your revenues, expenses, and costs during a determined period of time. 

All public companies are responsible for issuing these statements quarterly, as well as at the end of the fiscal year. Reviewing and understanding a P&L statement can help you evaluate your business’ fiscal health.

2) Know the Shape of your Finances  

Over half of small businesses are negatively impacted by late payments; how are your finances? Make a resolution to pay invoices on time and save late fees and charges. These expenses impact your cash flow and bottom line, over time.

3) Get Familiar with Your Cash Conversion Cycle  

The cash conversion cycle (CCC) measures the amount of time that it takes to move inventory, get paid, and, in turn, pay your own creditors. This cash flow determines how long between payments as well as how quickly you can turn-over your product. 

A familiarity with your CCC can indicate if you have a healthy cash flow as well as how long your company can survive in tight times. 

4) Become More Aware  

Part of your business self-awareness comes from checking out your financials. Develop and revisit a cash flow forecast and business budget for your company. 

It makes good sense to set aside a time, such as the end of the fiscal year, to review all your management practices and financial habits with a reliable and reputable accountant. Don’t have an accountant? Make now the time to retain one.

5) Tally Cash on Hand  

Do you know how much cash and liquid assets you have on-hand? It may surprise you; sometimes, companies don’t have as much readily available capital as they think – and need- which could put you in a bind if business is slow. 

Don’t risk the fiscal health of your company; take time to count up what you have on hand for liquid assets, i.e. cash, and begin to think about setting up a rainy-day fund.

Making changes or deciphering financials for your business can be confusing; make sure to discuss your options further with your accountant before altering the way you operate your company. These industry experts may be able to help guide and advise you on the best ways to reach a better bottom line.

Want to learn more about these financial variables, or other ways to enhance the condition of your company? Talk to the accounting professionals at BMH Accounting; they are familiar with financial variables that can make a significant difference in the overall value of your business investment.