2024-12-04 15:19:00
The majority of businesses opened in Brazil cannot survive for more than three years: 51.15% of them close their doors in this period of time. This is what a survey carried out by BigDataCorp (a company specialized in capturing, structuring, storing and distributing data) and reported by CNN Brasil.
Among the various factors that can lead a business to close is the lack of planning and correct analysis of the numbers, as Wallisson Deziderio explains. An accountant by training, he is CEO of Billion Contabilidade, a company that assists business owners in matters such as accounting, tax and personnel departments.
“The fact that many companies are at risk of closing their activities due to a lack of analysis of accounting and financial statements is a point that is often neglected, which can lead to serious consequences for the sustainability and survival of the business”, analyzes Deziderio.
He highlights the need to analyze the balance sheet, the income statement for the year (DRE, which show the performance of a business in a specific period) and other reports to identify possible financial, operational and management risks. Based on this, the company is able to make decisions considering accurate information and organize itself better.
Deziderio also mentions other indicators that should not be forgotten by anyone who has their own business. They are: current liquidity (measures the company’s ability to pay its short-term obligations), dry liquidity (similar to current liquidity, but excludes inventories) and debt ratio (measures the company’s degree of dependence on external financing to finance its operations)
“Without these indicators, managers are unable to make well-informed financial decisions, which can result in insolvency, cash flow difficulties and increased dependence on debt. Ultimately, the absence of data can significantly contribute to the closure of the business due to poor financial management”, warns Deziderio.
The term “insolvency” that the expert referred to is used to describe when the business can no longer meet its financial obligations. This is the case, for example, of a company that incurs debts so large that paying them becomes unfeasible.
“The combination of lack of financial planning, inadequate management, lack of adaptation to the market, undercapitalization, problems with cash flow, intense competition and lack of management qualifications are some of the most frequent causes of failure”, assesses the CEO of Billion Contabilidade .
For Deziderio, it is essential that entrepreneurs seek knowledge, carry out solid planning, regularly analyze financial indicators and be prepared to deal with market challenges. “This minimizes the risks of bankruptcy and increases the chances of business continuity”, he summarizes.
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#Lack #accounting #analysis #threatens #company #survival
What are some key financial indicators that new business owners should focus on, besides profits?
## Interview with Wallisson Deziderio, CEO of Billion Contabilidade
**Host:** Welcome back to the show. Today, we’re discussing a concerning statistic: over half of businesses in Brazil fail within the first three years. Joining us to shed some light on this issue is Wallisson Deziderio, CEO of Billion Contabilidade, a firm specializing in helping businesses navigate the complexities of accounting, taxes, and personnel management.
Wallisson, thanks for joining us.
**Deziderio:** Thank you for having me.
**Host:** Let’s dive right in. Why do you think so many businesses fail so early on in Brazil?
**Deziderio:** It’s a multi-faceted problem, but a significant factor is the lack of proper financial planning and analysis. Many entrepreneurs don’t fully grasp the importance of carefully analyzing their accounting and financial statements. Neglecting this can have serious consequences for a business’s long-term sustainability.
**Host:** So, what specific information should business owners be looking at?
**Deziderio:**
It’s crucial to regularly examine your balance sheet, income statement, and other key reports. These documents reveal valuable insights into a company’s financial, operational, and managerial health. By identifying potential risks early on, businesses can make informed decisions and take proactive steps to mitigate those risks.
**Host:** You mentioned other indicators. Can you elaborate on those?
** Deziderio:**
Absolutely. Current liquidity is vital, as it shows a company’s ability to meet short-term obligations. Other important factors include profitability margins, operating expenses, and cash flow analysis. Understanding these metrics allows for better financial planning and resource allocation.
**Host:** That’s a lot to juggle for new business owners. What advice would you give to those just starting out?
**Deziderio:** Seek professional help.
Don’t hesitate to consult with an accountant or financial advisor who can guide you through these crucial early stages.
They can help set up proper accounting systems, identify potential pitfalls, and provide valuable financial insights to ensure your business thrives in the long run.
**Host:** Excellent advice. Thank you, Wallisson, for sharing your expertise with us today.
**Deziderio:** My pleasure.
**Host:** And thank you to our viewers for tuning in.
[1](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2802706)
