When driving we spend most of our time looking ahead to see what is coming up ahead whilst keeping an eye on the rear view mirror to check behind us. Accountants are often criticised for spending too much time looking back. Financial reports, tax returns, BASs, audit reports; all of these look back at what has happened in the past. They are important tools but the real question is what lies ahead?
Whether or not we agree with the content, the mantra of the Federal Budget is that we need to ensure that we prepare for the future. So our level of debt, tax take, future health care costs, spending on social services and the cost of the public service have all been projected forward with the objective of ensuring that our nation will be able to meet our future obligations.
Whether you read this as an individual, a business owner or an executive; individuals, families, organisations and businesses need to look back to understand what has happened but look forward to plan for the future.
When a person comes to us for financial advice, the starting point is usually to understand their current income and spending patterns and then to project forward and plan around the things that are yet to come. Children, education, health and lifestyle being the big items on the cost side, and careers, investment and then retirement on the income side.
When we assist a business with their planning we need to understand the past. We then look ahead and understand factors like business cycles, product life and consumer trends, how growth can be achieved and the resources required to drive growth. We can model the future based on our understanding of the past.
As a new financial year ticks over, it is still not too late for a business to develop a budget and business plan that looks ahead – not just one year but 3, 5 or 10 years. It is also a good time for individuals to consider things like salary packaging, adequacy of superannuation and investments for your retirement. Also consider the steps you should be taking this year to enhance your own financial position so that you have a sustainable financial future.
Saward Dawson is here to help individuals, businesses and organisations. By looking in the rear view mirror we understand the past and can then look through the windscreen to plan ahead for the future. Why not call the manager or partner you know to discuss how we can assist you?