Proper preparation of the overall financial status of a farm business, writes Sandra Woodbridge (VeriBIZ), is essential for monitoring the financial well- being of the company. Attention to detail and asking the right questions can make the difference between success and failure.
I have often been asked: “What is an area where a farm business could make a meaningful improvement.” During meetings with many farmers within the past six months I would say that a common area needing improvement would be in the clear creation of a well-structured financial statement. There are few farm businesses where I have not had to do quite a bit of work on one or more of the following: Asking in-depth questions; developing balance sheets1; consolidating numbers; or making assumptions in order to come up with a meaningful financial report card for the business. Most financial statements fall short in addressing these key issues.A financial statement shows the overall financial status of your business and using statements to monitor your financial health can make the difference between success and failure. There are three key benefits to having a quality financial statement prepared:
1) It is a powerful decision making tool for your business;
2) It is necessary to access credit;
3) It may be needed for compliance.
Think about your farm operation; could you benefit from a consolidated financial statement presentation?
For more information or for a review of your financial statement presentation, contact your VeriBIZ Advisor.
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