1. What does the overall financial health of your business look like this EOFY, and into the future?

Your business advisor should do more than just provide you with a set of EOFY financial statements. Ask them to also analyse your income statement, balance sheet and cashflow statement to help you understand your profitability, liquidity and solvency, so that you can identify any areas needing improvement and make informed decisions.

2. Are there ways to improve your accounting and reporting processes?

To make sound business decisions, you need up-to-date financial reports and analysis throughout the year, not just at EOFY. Ask your advisor for recommendations on implementing efficient accounting systems using current technology, and on generating timely and meaningful management reports.

3. What key performance indicators (KPIs) should be monitored?

KPIs or financial ratios – such as current ratio, quick ratio, debt to equity ratio, inventory turnover ratio, average debtor days ratio and ROI – provide valuable insights into your business’s performance and can help you benchmark against industry standards. Ask your advisor to show you how to calculate them and explain their significance in evaluating your business’s financial health.

4. Can you upgrade your budgeting and forecasting procedures?

A detailed and accurate budget is an important tool for preparing for the year ahead, and your advisor should suggest reviewing historical data to identify patterns, trends and seasonal fluctuations. This will help you to set realistic goals, create multiple scenarios, and implement rolling – rather than static – forecasts.

5. How can your cashflow be improved?

An optimised cashflow to help provide adequate working capital is one of the fundamental requirements for business longevity and success. Seek advice on strategies to improve collections from debtors, manage your accounts payable and increase inventory turnover rate. Also ask for guidance on how to prepare and use a cashflow forecast.

6. What business growth opportunities are available?

A good business advisor will tell you where you are now, help you work out where you want to be, and assist in devising strategies to get you there. Discuss your long-term financial goals and evaluate whether your business’s performance aligns with those objectives. This may involve diversifying revenue streams, adjusting business operations, seeking funding via debt or equity, and taking into account any potential challenges.

7. Does your pricing strategy need work?

Accurate and competitive pricing plays a vital role in the profitability of your business. Request a review of your pricing strategy to assess its effectiveness. Your advisor should be able to offer insights on pricing models, market trends and competitor scrutiny.

8. Can your tax liabilities be reduced?

Tax planning is crucial for businesses, and a financial advisor should help you to maximise deductions and credits while ensuring compliance with current tax law, including any recent or upcoming changes. Your business advisor should also help you to structure your business in a way that is most effective from a taxation standpoint.

9. What should be done to reduce your exposure to risk?

10. Do you need succession plans for key positions?

Succession planning is important to ensure your business is well placed to continue its goals and strategy with a high performing team. Your business advisor should help you identify key positions and potential successors, or gaps that need to be filled by training or recruitment.