Don't neglect your annual accounts!
I am regularly confronted with reading and understanding annual accounts. All too often, I find that the sole purpose of drawing up these accounts is to pay as little tax as possible.
This is obviously one of the objectives of sound management. That is obviously one of the objectives of sound management, that of paying a minimum of taxes in compliance with the legal provisions.
Take care of your image, your year-end balance sheet is your communication tool.
The quality of the information available to your external and internal employees is of paramount importance in the context of the sustainability of a company.
At each audit, I attach great importance to reading the company’s annual accounts. For example, what is the amount of your company’s equity capital in relation to total liabilities? Are the long-term assets financed by long-term debts? What is your cash position? Can it meet your immediate requirements? What is its capacity to absorb your future developments ?
Do the exercise yourself, read your annual accounts and put yourself in the shoes of your bankers, suppliers, customers and employees. What will they think if your equity represents only five percent of your balance sheet? Will they want to see you as a reliable partner?
In future, when you draw up your next annual accounts, don’t just look at your short-term objectives, but make your partners want to accompany you in your future projects. You will reverse the balance of power, your position will only be better.
For companies that are required to file a management report, this is a great tool. The content must correspond to the Company Code but you can include your messages of ambitions and current projects. If, through this report, your partners understand that your company is thirsting for growth and is in sound management, you will have succeeded in communicating effectively!