Let me ask you a few questions:
Does your bookkeeper or accountant advise you on tax-saving strategies throughout the year? If not, you may be paying much more than your fair share of taxes.
This is the basis of continuous improvement; you must always search for a better way to accomplish a business’s main functions. Here are some guidelines for helping clients improve internal processes:
Do they help you properly monitor or manage your cash flow, giving you the peace of mind that you deserve? In other words, do you regularly call the bank to check the balance of your account?
Most importantly, do they help you increase your business profits? There’s a wealth of information in your financial records right now. Are they helping you understand your business?As a business you need the information that can influence key business decisions. As such, you should always have the most recent data regarding your business compiled into information you can use.
This is best done by searching the data found in the bookkeeping of the business. In fact, you should never stop asking questions, the most important of which includes, Is there a better way to…?
1. Find the problem and create a solution. Once you have identified the problem, or area for improvement, the first step is to brainstorm potential changes. Then, quantify the cost and potential revenues. Next, test your theory by making the changes. Finally, work for the results you want, evaluating all possible outcomes.
2. Use data and information from your accounting system to help solve problems. This information comes from your historical database of revenues and expenses within your accounting system. Without this data, businesses are shooting in the dark and missing most of the time. You should present this information to clients in such a way that they can use it to increase their business’s profitability.
3. Continually benchmark against competitors. One of the most insightful tools to identify a business’s strengths and weaknesses is to compare its financial information with that of its competitors. To make this tool useful, you must analyze a business against other businesses of equal size in the same industry. This is called “Benchmarking.” From this study, you can identify areas in which the business is excelling and should maintain. More importantly, it will identify areas of interest where competitors may have figured out something your client’s business still needs to learn. Much competitive information is available for free, or for a nominal cost, from different business and industry associations across the country.
Proper accounting can give you a clear picture about what is going on inside your business. Are you working IN or ON your business? Let us help you take control and run your business again intelligently.
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