What a Financial Health Diagnostic Should Reveal

A diagnostic should produce priorities, not paperwork

A useful diagnostic is not a generic score or a long list of observations. It should reveal which weaknesses matter most, how they affect decisions, and what leadership should address first.

The goal is not more financial information. The goal is a clearer view of what is happening, what could go wrong, and what leadership should do next.

Six dimensions worth examining

Record reliability. Are transactions current, do major accounts reconcile, and are unusual or old balances explained? This is the starting point every later conclusion rests on.

Close and reporting. Is there a calendar, clear ownership, review, and a consistent delivery date, and do the reports actually explain performance? The outcome is timely information leadership can use.

Cash and working capital. Are collections, payables, inventory, payroll, taxes, debt, and short-term liquidity actively managed? The outcome is early warning and fewer cash surprises.

Profitability. Can leadership see margin by meaningful product, service, customer, channel, location, or project? The outcome is better pricing, mix, and resource decisions.

Controls and risk. Are approvals, access, documentation, segregation of duties, and escalation appropriate for the size of the company? The outcome is reduced error, fraud, disruption, and key-person risk.

Forward visibility. Are forecasts tied to operating assumptions, and are scenarios and decision triggers documented? The outcome is a disciplined view of what may happen next.

Every finding should connect to a business consequence: cash, margin, control, decision quality, financing readiness, or leadership capacity.

What the final output should include

An executive summary in plain language, covering the overall condition, the highest risks, the strongest capabilities, and why the findings matter now.

Evidence-based findings. Each material conclusion should point to documents, processes, interviews, reconciliations, or observed gaps, not intuition alone.

Prioritized risks, where urgency and impact separate immediate threats from improvements that can wait, and a sequenced roadmap showing what happens first, who owns it, what depends on it, and a realistic time horizon.

A split between quick wins and structural work, since some issues can be corrected immediately while others require process, systems, policy, staffing, or leadership change.

Clear boundaries identifying where tax, legal, audit, valuation, cybersecurity, HR, or other specialists are needed, and explicit decision points describing what leadership must decide and what information would change the recommendation.

A practical priority matrix

Immediate. Material risk to cash, compliance, payroll, financial accuracy, or operational continuity, such as unreconciled cash, missed payroll taxes, unknown liquidity, or a critical access weakness.

Next 30 days. A control or reporting weakness that impairs routine leadership decisions, such as a late close, unreliable AR aging, unclear approvals, or incomplete balance-sheet support.

Next 60 to 90 days. Infrastructure needed to support growth and consistent management: forecasting, KPI definitions, profitability reporting, documentation, and team design.

Later or monitor. A useful improvement whose risk or benefit does not justify immediate disruption.

Questions the diagnostic should answer

Can leadership trust the current numbers, and how quickly can the company produce complete monthly reports?

Where could cash pressure appear in the next 13 weeks?

Which customers, services, products, or locations create or consume margin?

Which controls depend on one person?

What decision is leadership currently unable to make confidently, and what are the first three changes with named owners?

How to prepare

Provide what is available: recent income statements and balance sheets, bank and credit-card reconciliations, AR and AP aging, a close checklist or calendar, any budget, forecast, or KPI package, debt, payroll, tax, and major contract obligations, and a simple map of systems and team responsibilities.

Do not delay a diagnostic because the records are imperfect. The condition of the records is itself meaningful evidence.

SHH's Financial Health Diagnostic is a focused leadership session and written executive assessment designed to give a clear view of the current financial environment and the priorities that deserve attention next.