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Two things about the economy you need to consider to improve your company's 2015 finances

by , 10 November 2014
At this time of year, you need to start preparing for 2015. This means forecasting your company's expenses and creating a plan of action that will help you make 2015 financially successful.

You'll do this by analysing your company's financial history.

But that's not all you have to analyse.

You need to look at the bigger picture and analyse the economy as well.

Here's what you need to look at...

 

When you analyse the economy, consider these two things

 
1. The exchange rate
It's important to see what the exchange rate is doing because. If the rand is weak, it means you'll pay more for all your imported supplies. This, in turn, pushes your overall production expenses up. 
 
If you can see the rand has weakened steadily over the past three years, it's unlikely to change. Take this into consideration when you do your forecasting.
 
Here's the second thing you need to consider.
 
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2. Inflation
Higher inflation means higher expenses for everyone. If people can't keep up with the cost of living, they may not have money to spend on your products and services. 
 
If inflation rose is 2012, 2013 and 2014, chances are it will, at the very least, stay the same, if not continually increase next year. 
 
This means you may need to cut back on expenses you can no longer afford and you'll need to have a plan for times when people don't buy your product.
 
Analysing these two things can help you assess what the economy will be like in 2015 and give you a chance to prepare for whatever comes.
 
For more help with preparing your finances for 2015, check out the Practical Accountancy Loose Leaf Service
 

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