Company Health - The Friendly Financial Investigation Tool






*IMPORTANT: One of the key ingredients for this module to provide the most powerful of information to you is the allocation of income and cost of sale accounts to specific product lines.

This technique will allow you to both analyse the profitability of the company as a whole as well as the individual product lines.


*In case of doubt feel free to reach out to us for guidance on how to achieve the best account setup to maximize your analysis potential by Funancial SMART. 

Remember that out of the box, Funancial SMART will allocate all of your income *accounts and all of your Direct costs or Cost of Sale accounts to "Product #1". Should you want to refine the account allocation to cater for additional product lines this can be achieved from Configuration > Company Settings > Products I sell


The Company Health module is broken down into three reporting periods (represented by tabs at the top of the screen):
  • Current month – Actual Income, Actual Operating Expenses, Projected Gross Profit and Projected Net Profit (these projections are based on the average Cost of Sales and average Operating Expenses over the past 3 months ).
  • Previous Month – These are the actual Income, Gross Profit, Operating Expense and Net Profit figures for the previous month based on the information captured in Xero.
  • 3 Month Average - These are the actual Income, Gross Profit, Operating Expense and Net Profit figures for the PAST three months (i.e. – the current month is excluded from these figures) based on the information captured in Xero.

Big blocks and detail panels

Each period (Current Month, Previous Month and 3 Month Average) has a prominent row of blocks showing the summary financial information for that specific period.
The figures in each block are compared with the figures for the previous period (Current Month is compared against the previous month; Previous Month is compared against the month before and 3 Month Average is compared against the previous 3-month average).

The colour of the blocks changes according to the result of the comparison:
  • Green – things are moving in the right direction when compared against the previous period.
  • Amber – nothing has changed in comparison to the previous period
  • Red – things are moving in the wrong direction when compared against the previous period
From a decision-making perspective, the bottom line is:
  • Red blocks need attention and should be the highest priority for investigation
  • Actions that resulted in green blocks should be investigated and strengthened
  • Actions that resulted in grey blocks can be left alone but should probably be investigated to see if anything needs to be done to turn these blocks green
When making decisions, the general rule is
  • Focus on the top/bottom 3 items that relate to the factors that you are investigating. 
  • To help you focus your efforts, Funancial SMART shows you the top/bottom 3 items relating to each of the 4 blocks.
Tip: You can use the selectors in each detail block change the information presented in relation to the area you are investigating, or to quickly compare figures for each period.

Making decisions

Do I need to strengthen or change my sales strategy (income)?

  • If your Income block is red, the answer is that you probably do need to change your sales strategy. 
  • Income is down when compared to the previous period and this is never a good thing. Have a look at the Top Customers and Top Service Sales in the Income detail panel. 
  • Use this information to decide which customers you should focus on selling more services to or which services you should focus on be selling.
  • Tip: Click on the Amount heading to reverse the order. This gives you the bottom 3 customers/services which you may want to consider strengthening or getting rid of.

Am I making enough money on the services I am selling (gross profit)?

  • If your Gross Profit block is red, the answer is probably no. You now need to answer one of the following questions:
  1. Do I need to increase my prices? Have a look at the Top Grossing Services information in the Gross Profit detail panel and click on the Amount heading to reverse the order. This gives you the bottom 3 grossing services. You need to consider increase pricing for these or consider getting rid of these services completely. If this isn’t a viable option, you’re probably are going to have to consider increasing your prices to resolve this issue.
  2. Do I need to negotiate discounts from or change suppliers? Have a look at the Expensive Suppliers information in the Gross Profit detail panel. Getting discounts from your top 3 suppliers will help increase your gross profit margin. 

Should I be concerned about my operating expenses?

  • If your Operating Expense block is red, the answer is yes.
  • Have a look at OPEX Increases in the Operating Expense detail panel and confirm that this was necessary. (you may want to look at more than 3 in this case – just to make sure that there are no other issues that may come to bite you in the near future).
  • Note: There are times when an increase in operating expenses is vital to support or deliver to an increase in sales volume or profitability.
  • Examples include an increase in telephone costs (necessary to generate sales or improve customer services), fuel (necessary for customer visits to deliver more products/services, improve customer relations etc), training (necessary to improve customer service, quality of service etc), marketing (necessary to increase sales). 
  • These are often overlooked and the trap to avoid is making a decision to cut an operational expense just because it is increasing. Careful consideration needs to be taken when decisions to cut operational expenses are made.
  • If the increase was not necessary, implement the necessary corrective actions and make sure it does not happen again.
  • If the increase was necessary, focus on increasing sales and reducing the cost of sales (see Am I making enough money on the services I am selling (gross profit)? above)
  • Operating expenses require constant evaluation and can get out of hand in a very short space of time. Have a look at OPEX Decreases in the Operating Expense detail panel and see if you can put measures in place to keep the top 3 as low as they are now.

Am I in danger of losing my company soon and is it even worth continuing (net profit)?

  • If your Net Profit block is red, the answer to the first question is possible and to the second question is not really.
  • Don’t take this too literally! The purpose of these answers is to motivate you to do something to improve the situation, not to give up when things are getting a little tough. Just because things look bleak right now does not mean that it is time to throw in the towel.
  • Net profit is directly affected by Income, Operating Expenses and Cost of Sales (yes – I am aware that I am stating the obvious). 
  • You may need to become more assertive in: 
  1. increasing prices to your customers – consider increasing by a higher percentage.
  2. Identifying your bottom performing customers and consider cutting ties with them soon. This can be determined by sorting Top Customers in descending order. 
  3. Negotiating discounts from your suppliers – consider pushing for larger discounts or consider changing suppliers to increase your gross profit margin. Caution is advised.



*NOTE: Changing to a cheaper supplier could affect the quality of the service you are delivering and this would defeat the objective in the long term. Pushing good suppliers for discounts could lead to these suppliers not wanting to do business with you and, if they are suppliers who rely on you heavily - this too could defeat the objective too.  

  • At all times, use judgment and be assertive, not aggressive.
  • Cut back on operating expenses – use the OPEX increases in the detail panel but this time, have a look at your top 5 or top 10 increases (assuming that there are more than 3) and follow the same process for Should I be concerned about my operating expenses? above.