Business is quite often a large part of one’s life, and just like any other activity in the daily life of a person, he needs to be clear headed completely to be able to make the business function smoothly. In short, an absolute clarity is required. And since, finances are the most important thing in any kind of business, clarity of the finances is mandatory.
Whether it is the past, present or future, there should be complete transparency and clarity about any activity done. The three stages of life has to go hand in hand with full co-operation, only then will it be possible to get an understanding of what the business is going to bring about for its owner. It is like a three legged stool, of which if one leg is removed, it cannot stand.
There are basically three types of advantages you can get from a financial clarity. They are:
It helps you get a grip over your emotions, particularly the anxiety causing emotions. Your anxiety is reduced to the minimum that is possible only with a financial clarity. The anxiousness is mostly concerned about the apprehensions of an uncertain future, whether or not any undesirable situation has to be met, and if you are faced with it what would you do to get out of it, so on and so forth.
Many companies do not have proper financial statements, which is why they cannot asses their performance over the year; the only way they analyse this is, by knowing how much cash balance they have in their account. This they can do by consulting professionals on the front, someone like Emily Muhleman who has several years of experience. This is what qualifies to be called a guru in many financial issues like equity and debt financing, research analysis, financial modelling, industry research, so on and so forth.
It helps in making tactical or strategic decisions. Clarity of the past can be got by keeping a report of the financial or managerial position of the company, regularly; whereas the present can become clear with the help of various cash management tools along with weekly dashboard reports. Further, the financial clarity of the future of your business can be got by combining short-term cash flow projections, a five year plan, an annual budget, and a financial model of the present day.
Finally, a financial clarity can help you in improving your strategic decisions regarding the finances of your business, and in turn the bright future of your business. Added to this it should be mentioned here, that apart from helping you to make those decisions, a financial clarity also helps to get those strategies moving and bring about the best results.
Any expert professional of finances such as U.S. based Emily Muhleman are of the opinion that no business can expect to prosper without the employment of financial tools like the financial clarity and model.