Understanding your business finances Understanding your business finances

Understanding your business finances

Understanding your business finances can help you • Improve profitability and value • Make better financial decisions • Be prepared for the future

Have a proper accounting system in place 1. A computerised bookkeeping system 2. Set up by an accountant 3. Data input by someone suitably trained

The benefits of ‘cloud’ accounting • MTD compliant • All online, so you can access from anywhere • Helps you work collaboratively with your accountant • No upfront software costs or infrastructure costs • Less paperwork to file and store • Makes bookkeeping easier

Check your results through the year 1. Profit and loss report 2. Balance sheet 3. Aged debtors and creditors reports 4. Cash flow forecast

Profit and Loss report

Profit and Loss report

Profit and Loss report

Balance Sheet

Know your pharmacy’s worth and how it compares 1. Get a valuation of your pharmacy 2. See how it compares to others – ‘Benchmarking’

Gross profit margin

Staffing costs • Target Staff cost to sales ratio: 14 -16%

Plan for improvement • What are the key areas affecting profitability? • How can these be improved? • What do we want to achieve and when? • Monitor results, review and re-evaluate

Think about the future • What is your eventual plan for the business? • Get good advice as early as possible • Identify any areas that can improve your tax position • Implement strategic changes