When financial performance maturity is basic
In some organisations, the financial performance maturity is basic.
This means that you probably rely on a key person to provide financial performance data such as a profit and loss statement or a cost centre report.
The reporting and planning might be ad hoc i.e. it is not routine or predictable.
The reporting is mostly manual, and the reports are probably slow to be published and by the time its reported, it’s not very relevant.
You probably don’t finalise the budget before the financial year starts which could mean that inadequate planning has taken place.
What you can do to improve your basic financial performance maturity
The business would benefit from the accountant preparing a monthly profit and loss statement so that management can review the performance of the business by comparing income versus expenses.
We recommend the management meet within the last quarter of the financial year and budget the income and expenses for the coming year and publish it before the year begins.
A very rudimentary method would be to take the prior year and add a realistic percentage for growth and taking inflation into account.
If you would like to take the performance maturity assessment to understand your overall score, please find the link from here: