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Financial management

Early warning signs to monitor

ANZ Financially Ready

2022-08-08 00:00

Key points

  • Low profits, whatever the reason for them, can put your business at risk.
  • Being able to access finance could be the difference between a thriving or declining business.
  • Accurate record-keeping is an essential part of running a sustainable business.

If you’re keen to stay in business a long time, you’ll need to become familiar with key business health indicators. Whether you’re a sole trader or a small business with employees, proactively monitoring these key elements could make all the difference to the success of your business. 

These signs indicate your business might need some attention:

Your profits are low

Maintaining profitability is key to being – and staying – in business. If your profit is dwindling, your business may be in decline. Keeping a close eye on the profitability of your business means you can better identify these trends before they become too big to turn around.


Discounting eats into your profit. There are other ways to attract and retain customers beyond discounting. Find opportunities to add value in other ways, such as referral programs, incentive schemes, special events or exclusive access to products or services.   

Staff productivity

Reviewing your staffing and rostering schedule can help boost productivity. Are you making the most of every staff member’s talent, capacity and rostered hours?


If your profit margin is slim, it can be challenging to keep your business profitable. Reviewing your ongoing costs and expenses regularly helps ensure you’re pricing your goods or services appropriately. If wages and other business costs rise, you may need to adjust your prices.

Customer attrition

People move interstate, change their spending patterns, and age out of certain products and services - even the best businesses experience customer turnover. If you’re slowly losing customers, your profitability will start to dive. Keep track of your customer database and devise strategies to find new customers to replace the ones that move on. Read our tips on how to attract more customers.

You’ve got limited access to finance

Being able to access finance when you need it could mean the difference between your business thriving or declining. Speaking to your bank sooner (rather than later) will help put you in a better position to access finance for your business.

Watching your financial position closely by tracking cash flow forecasts (template xlsx 114kB) and profit and loss statements (template xls 1.5MB)  may help you to anticipate and plan for financial hurdles before they arrive.

Renegotiating payment terms with suppliers is another way to manage your finances in the short-term.

Your financial records are incomplete

Accurate record keeping is an essential part of running a business. Without up-to-date records, the viability of your business will be unclear. Whether you use cloud-based accounting software or use your own record keeping methods, your financial records (like invoices, payments and payroll data) provide a snapshot of where your business is at.

Meeting your financial obligations is a struggle

Managing business debt can be tricky. If you’re constantly struggling to find enough cash to pay your bills and wages, you may need to reassess your business position. 

  • Review cash flow statements frequently for important insights into where you cash is coming from (and where it’s going).
  • Put systems in place to chase overdue payments from customers.
  • Devise strategies to shift surplus or old stock.
  • If needed, consider a temporary bank overdraft or loan.

Next steps

Need some assistance to get your systems in order?

Download our Balance sheet template (xlsx 1.5MB) and Profit and loss template (xls 1.5MB)

Early warning signs to monitor
Business specialist
ANZ Financially Ready

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This is general information only, so it doesn’t take into account your objectives, financial situation or needs. ANZ is not giving you advice or recommendations (including tax advice), and there may be other ways to manage finances, planning and decisions for your business.

Read the ANZ Financial Services Guide (PDF) and, if applicable, the product Terms and Conditions. Carefully consider what's right for you, and ask your lawyer, accountant or financial planner if you need help. 

Any tools, checklists or calculators produce results based on the limited information you provide so they are an estimate or guide only. As they are incomplete, they are not a substitute for professional advice.

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