The most important aspect of the accounting function is the generation of financial information that can be used to proactively run the business. It is important for the business owner to understand what the numbers mean and what decisions need to be made from that information.
Financial results are always compared to expectations whether formal (budget) or informal (gut expectation). Only in a perfect world do results always match expectations. It is very important to understand the differences and causes. This allows the business owner the opportunity to make changes to meet expectations.
There are significant benefits to formalizing expectations. See Benefits of Budgeting & Forecasting.
Is your current financial guidance providing you with your required understanding of your business results? If you are not getting exceptional financial guidance, contact CFO 4 Small Biz™ to find out how we can help.