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Finergy Five! Do You Know These Elements?

February 20, 2017

Hey there, thanks for stopping by. Today we are switching it up a little bit. From time to time we will be posting what we like to call the Finergy Five, which will consist of various top five list. Today in our first Finergy Five, we will be looking at five key financial elements:

 

1. Revenue and Accounts Receivable – To run your business, you need to understand where your revenue streams are coming from and how your clients pay you. The relationship to between revenue and accounts receivable is an important part of understanding cash flow.

 

 

2. Expense and Accounts Payable – To ensure you are making a profit, you will need to understand your expenses and when/how you are paying your bills. You should know what is driving your costs and if they are all needed to drive revenue.

 

3. Cash Flow – Cash flow is looking at how cash is flowing into and out of your company. Is your cash coming in from sales, financing or investors? How much cash is leaving your company and why? These are some of the questions you should be able to answer.

 

 

4. Profit – To achieve profit your revenue should exceed your expenses. If your revenue exceeds your expenses, you have a net profit. If your expenses exceed your revenue, you have a net loss. The goal in business is to have a net profit.

 

 

5. Budget/Forecast – Often these two words are interchangeable. The budget or forecast for our purposes means a model used to predict what your business operations will look like in the future. Understanding where your business is heading is crucial to your success.

 

 

Over the next couple of weeks, we will be looking at these elements in more details. Check back weekly to find out more. Finergy Inc. is here to help if you need assistance understanding any of these elements call us today.

 

 *We hope you enjoyed our blog.  Please note that the intent of this blog is to provide general information and should not be construed as financial, financial tax, accounting, legal, consulting or any other type of advice regarding any specific facts and circumstances, nor should they be construed as advertisements for financial services.

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