Business Financial Planning

Accounting is the art of accurately recording what’s already happened. Finance is the art of looking ahead to what may come, reducing the chance of being surprised, and developing a plan for profits and cash flow that’s tied to activities owners and employees understand. And it’s not just a forecast of your summary Profit and Loss statement. Your plan needs to include your balance sheet – because changes in items that aren’t on the P&L have huge effects on cash flow. Those are typically timing items like accounts receivable, inventory, investment in fixed assets, payables, vacation accruals and many others. Big Rock works with its clients to understand their businesses and develop powerful but easy to understand financial projections that integrate the income statement and the balance sheet. The projections are based on simple metrics that might not even be a financial statement line item, but that are significant indicators of actual financial performance. After all, managing to dozens of financial statement line items can be a challenge – but managing to a few key indicators or metrics is something a business owner can do every day.

And it’s not enough just to have a plan. Big Rock helps companies review their performance against plan each month or quarter, and update the plan with the most recent information – information that will affect your expectations of future cash flow. The periodic review process helps reduce or eliminate cash flow surprises.

And don’t forget taxes. All too often small to mid-sized companies file their tax returns on a cash basis, but accurate accounting requires that the books be kept on an accrual basis. Big Rock’s financial plans convert accrual-basis accounting information and projections to cash-basis tax projections, so that owners have the best information possible regarding what their quarterly and annual tax liability will be.