Monitor trends. Ask two key questions:
1. By what percentage have our net profits grown over the past three years?
2. How does that percentage compare with industry benchmarks?
Armed with the answers, you can propose ways to cut expenses or boost profits.
Read the financials. If you’re not already getting them, ask your boss to put you on the routing for your company’s and your department’s monthly financial reports. Even if you’re not privy to company-wide figures, you should be seeing expense details and any revenue figures for the department you oversee. Sales reports and other tracking devices—like Web site traffic reports—also may be useful, especially if they change rapidly.
Take time to review these reports. Bring your boss any questions. He may be relying on you to find errors and opportunities.
Find a financial mentor. Unless you attended business school, you’re probably self-taught in how to read a balance sheet or profit-and-loss statement. While some companies embrace open-book to demystify the process, you may need to enlist a financially savvy mentor to help you understand critical ratios that drive your business.
An insurance underwriter, for example, asked the director of financial planning to tutor him on the factors affecting the combined loss ratio. Once he understood it, he taught his team how vital is was to contain costs and work with the sales force to build business.
Like what you've read? ...Republish it and share great business tips!
Attention: Readers, Publishers, Editors, Bloggers, Media, Webmasters and more...
We believe great content should be read and passed around. After all, knowledge IS power. And good business can become great with the right information at their fingertips. If you'd like to share any of the insightful articles on BusinessManagementDaily.com, you may republish or syndicate it without charge.
The only thing we ask is that you keep the article exactly as it was written and formatted. You also need to include an attribution statement and link to the article.
" This information is proudly provided by Business Management Daily.com: http://www.businessmanagementdaily.com/8005/understand-your-firms-financial-health "