Getting the most out of your business accounts
Most of us are fairly good at keeping track of our business accounts. We have to be. If you do not keep up with your accounting tasks you soon run into problems with the VAT and tax authorities.
Fortunately, tools like this business invoice tool from freshbooks.com have made it a lot easier to keep up to date. It only takes moments to produce an invoice using a system like that and it can be done anywhere if you use the app. Plus, it is easy to integrate the information with other financial packages you may be using.
But what we do with our business accounts once we have logged everything has not changed. We are all crazy busy, so there is a tendency for us to kick certain tasks down the road. One of which is creating, printing off and analysing our business accountancy reports. If you are doing that, there is a good chance that you are missing out. As you will see, there is a lot you can do if you make the most of your accounting reports.
Monitor cash flow
Top of the list is keeping track of cashflow. Every year, tens of thousands of profitable businesses have to fold because they run out of money. Some of them even have full order books when they do. It is just that they do not have the money in the bank to pay their electric bill or to buy the new materials they need to produce those orders.
The sad thing is that, often, if they had been keeping track of cashflow they could have avoided ending up in that situation. Potentially, you can look months ahead and spot those times when your firm is going to be short of cash. Seeing these things in advance gives you time to act and steer your firm away from trouble. You can for example arrange a short-term loan or have a sale to turn some of your stock into cash. Sometimes this is a cheaper and easier option than seeking finance.
Identify your most profitable products and services
There is a tendency to automatically think that the thing you sell the most of is what is making you the most money. Of course, it is good to know what your best-selling products and services are. But it is even more important to know which of them makes you the highest profit margin. Once you know that you can concentrate on marketing them better so that you can maximise your earnings. This article explains the right way to go about doing that.
Even if you are not good with numbers, do not be put off. It will not take you long to understand how to learn more about your business using your accounts. Armed with that understanding you will be able to become even more successful.