Understanding The Basics of Financial Literacy

Amit Bundhoo- Expert on Financial Literacy
Bhundhoo Tax Professional Corporation- An Accounting Company

“You should be able to budget; you should be able to forecast for the unforeseen, the what-if scenarios” – Amit Bhundhoo. 

On Empowered 4x Bizgram Episode 9, our guest Amit Bhundhoo talks about the importance of financial literacy and understand numbers to build & grow our business.

Understanding Your Financial Responsibility

Amit explains that there are a lot of small businesses that get behind on their basic obligations. So then, year after year, they’ve got this big headache such as taxes, fines, penalties. Also, the accountant you hire has a bigger job because it’s a bigger period. 

In fact, you have that responsibility every year to do your taxes and have at least a snapshot of how your business did in the past year, also, if you’re able to foresee in the coming months.

In addition, it has become more important for business owners to budget to forecast the unseen and the what-if scenario because of the pandemics. Therefore, small businesses need to be aware of what to do if something happens, and hence it is necessary to have financial literacy.

Importance of Financial literacy to understand the Numbers for Your Business 

Amit explains that for small businesses or aspiring entrepreneurs, it’s important for them to understand cash flow. 

It is important to know what is going on in your business, whether through credit cards or bank statements. In addition, understanding your cash flow is important. For example, how your money is being spent in your business, how it’s bringing money back, the return on the money you are spending, etc. 

In general, if you have a good understanding of the cash that’s going in and out, you have a good idea of the growth status of your business.

When it comes down just to finances, you budget with your cash flow, profit, and loss. So, those are the two main things you will have on the balance sheet. In fact, the balance sheet will balance with your profit and loss and your cash. So, first, the main thing you are looking at is the profit you’re trying to make from your business. Second, how much money is equated.

There are top three things that relate to your finances to know if your business is running sustainably well is. First, understanding your cash levels. Second, gross profit margin. Third, the cost of customers likes the costs of acquiring, acquisition, and retention costs.

In addition, Amit explains that these numbers associated with your business’s finances are something you need to understand. It would be best to nail down the finances to keep growing and moving your business to the next level. 

Connect with Amit Bhundhoo:

Facebook: https://www.facebook.com/bhundhootax

Instagram: https://www.instagram.com/abhundhoo/

LinkedIn: https://www.linkedin.com/in/amit-bhundhoo/?originalSubdomain=ca

Twitter: https://twitter.com/BhundhooC

Youtube:  https://www.youtube.com/channel/UCOyfURtbRb6Iy79ktIgVBFw

Website: https://www.bhtax.ca/

Bizgram Ep 9

You can catch the discussion with Chris-Beth and Amit Bhundhoo’s journey as an entrepreneur and his business in the first blog, The World of Accounting with Amit Bhundhoo!

Watch Amit Bhundhoo’s video: Bizgram Ep 9: Bizgrams with Amit Bhundhoo 

Amit goes on about why numbers are essential within an organization. What other aspects do you think are necessary for a business?

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