The Company Check-up: a Financial Examination for your Company Part III
Description:
Part 3 of a 3 part series, providing owners and managers with tips and advice on areas of their businesses.
Content:

This is the final installment of the three-part series. In this final discussion we’ll discuss Innovation, and Your Leadership.
(IX) Innovation
It’s time to take a look at your assets, current assets (those expected to be used in a year or less) need to be re-examined quarterly, fixed assets (those over a year) should be dealt with at a minimum annually, semi-annually if you have the time and you purchase a fair share of fixed assets within a year. What you want to look for here is the return on assets. How are your assets contributing to making a profit? If they are not or if the number is lower then the industry average you may have to consider purchasing new assets. Check each fixed asset against its accumulated depreciation, is its useful life nearly depleted? Your accountant made an assumption for how long that particular asset would be useful, chances are that asset may still be able to provide years of production to come, so this is not a rule of thumb, but simply a way of determining whether a course of action needs to take place.
Included in your assets are your receivables. Review your credit policy; examine your customers and clients. Is your bad-debt expense too high? Are you allocating too much write-off? This is the second biggest cancer to cash flow (sales is number one, if you don’t make a sale, you have no cash, period). Re-examine who you extend credit to, do they continuously pay late? If you have a large quantity of write-offs it may be time to consider collections, or factoring (selling your receivables at a discount).
(X) Your Leadership
This begins with a review of your product. How’s the quality
If they are a majority of your annual sales (smaller companies often sell to large corporations who use their leverage and size to determine volume of sales, price, and collection periods) determine if you have the capacity to add more clients and diversify your client base. Ar
Author: Jayson Cardwell
About Author:
Jayson Cardwell is the CEO and Founder of Cardwell Financial Group, a business and personal financial services company that assist established businesses, start-up businesses, and their owners navigate their businesses and finances. For more information visit them on the web at www.CardwellFinancial.com.
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