When you initially planned to buy or open your independent pharmacy, you showed your potential investors, partners, and lenders a business plan with well-documented financial statements. If a new opportunity presented itself today, how much time would it take to produce updated financial statements?
Management skills can be demonstrated in many ways: 5-star reviews online from customers, a team of stable, productive employees, and growing daily sales numbers. Though all of those are good (actually, great) things, if you are looking to take advantage of an opportunity to grow or expand your business, your potential partners, investors, or lenders look for the proof of your solid management skills in your up-to-date financial statements. If just thinking about producing them makes you cringe, you are not alone. Ask any lender, and they can share stories about receiving financial statements that are less than impressive: they are handwritten, barely legible, incomplete, incorrect, or just out-of-date.
Why is this important? Accurate, well-documented, and up-to-date financial statements that are easily available when you need them clearly express your management skills. It shows that you pay attention to the details that impact your bottom line. And if you want to take advantage of a new business opportunity, you need these at your fingertips now while the opportunity is hot.
What should your financial statements include?
Your financial statements should include:
- Income statement
- Balance sheet
- Cash flow statement
- Detailed documentation that supports each
Some of those details should include reports and details on:
- Accounts Receivable/Aging
The insights you gain by documenting and reviewing these elements regularly can help you identify and address potential problems earlier.
Small changes can make a significant impact.
Where can you find help?
Creating and managing financial reports is not your favorite part of owning a business? There are some options for help:
- Work with a bookkeeper or accountant to help you organize and manage the financial aspects. This person can help you set up the overall financial structures for reporting and help guide you on handling certain tasks to help them help you. This could include approaches for payroll, accounts payable, or invoicing procedures.
- Leverage one of the accounting software built for small businesses such as Quickbooks. In addition to providing a place to put all your financial information, it offers automated functionality for bill paying, overdue invoice reminders, and the creation of important documents, such as 1099s. One of the best things is that it has templates that allow you to produce financial statements and related reports with just a few clicks.
- Or use a combination of both: an accountant or other financial advisor to help you determine the best way to update and organize your overall financial processes. Then, use the software to manage the day-to-day tasks for accurate financial reporting.
It may never be your favorite aspect of the business, but attention to detail can pay off. Having quick access to detailed and accurate financial information will set your independent pharmacy business apart from others in your area and just might make the difference in whether you get the chance to seize an opportunity when it presents itself.