What is a Financial Diagnostic and Why is it Important For Your Business?
Updated: Aug 18, 2022
When your car starts making a funny noise, you bring it to the mechanic who then runs an auto diagnostic to find out why. In the same way, a financial diagnostic gives insight on a business’s financial issues.
Some accounting and monetary problems do not jump right out when looking only at the Profit and Loss or Balance Sheet. Therefore, it is best practices to “pop the hood" for a better look.
A financial diagnostic can detect issues such as: inaccurate or double postings, coding errors, chart of accounts problems, breakdowns in internal controls, poor cash flow management and more. It can identify ways to run more efficiently and effectively. The diagnostic is a tool to help the business move towards its goals.
Sand Dollar Bookkeeping offers diagnostic services that can be tailored to your company's needs. Just like the mechanic who provides options to fix your car after he is done with the diagnostic, Sand Dollar Bookkeeping will provide your business a summary of troubled area(s) and suggested options/recommendations to move forward.
Now, it is best practices not to wait until the “check engine light” of the business comes on so to speak to have a diagnostic done. A thorough review of your accounting/financial data and systems is a great tool anytime but crucial during these unparalleled times as we all look to the future.
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