Your business seems to be making money but there is never a profit left over at the end of the month, quarter, or year. Your bookkeeping reports are hard to read and do not really tell you anything that you can use to make your business run smoother or more profitably. You always seem to be one step behind in dealing with money issues so that your cash flow, or lack of it, is driving your decisions instead of you making decisions to improve your cash flow. In so many small businesses the root of this problem lies in the bookkeeping and accounting. Here are a few suggestions for how to get your books in shape and maximize your profits.
At Exigo Business Solutions we have been helping businesses in the Kansas City area and across the country for years. Our business is making your business work better and more profitably. When there are problems that arise from your bookkeeping procedures, or lack of them, we know how to assess the problem, develop a viable strategy for fixing things, put that plan into action, and work with you to maintain the improvements.
Here are the basic issues that we commonly address.
As the world of business has become more complicated over the years businesses need to use bookkeeping and accounting tools that not only keep up but provide business intelligence solutions to maximize efficiency and profits. The best bookkeeping software for small and medium-sized businesses is QuickBooks. We offer QuickBooks ProAdvisor Services and can help you choose the correct QuickBooks version for your business needs. We work with our clients to ensure a proper QuickBooks setup. And we provide QuickBooks training online, in our office, or onsite.
When you use QuickBooks you can generate QuickBooks Custom Reports that provide actionable business insights allowing you to properly manage your cash flow and budget effectively. With QuickBooks online, you can integrate with many useful applications that help with bill paying, money transfers, and business intelligence solutions for your business.
The standard “bank balance” method of bookkeeping is to take income and subtract expenses which gives you your profit or loss. This simple and basic approach does not lie to you but it does hide lots of important issues.
A recurring issue in all businesses large and small is one of human nature. When you assign a job to be done, you give the employee or employees a time limit and a budget. Far more often than not the job will only get done when the time limit is up and the budget has been exhausted! This is a function of Parkinson’s Law. This “law” of human nature was noted by a Brit, an ex-civil servant, back in the middle of the 20th century. What he said was, "work expands so as to fill the time available for its completion." Many folks had noted this before and many have noticed this afterward but Parkinson put it clearly. Since his time many “corollaries” have been added to Parkinson’s Law including the observation that the amount of money spent on a project expands so as to use up the allowed budget!
The reason that so many small businesses barely eke out a profit month after month and year after year is that behind the scenes Parkinson’s Law is having its corrosive effect on the business and its potential profits!
So, is there a way to counteract this “law” and maximize your business profits? Yes, there is and it is called Profit First.
The Profit First method of keeping your books takes the traditional bank balance method of bookkeeping and turns it around.
In Profit First, we take income and subtract profit as an expense and are left with expenses. The profit is allocated twice a month to its own bank account. This does two things. It immediately gives you the profit that you were not seeing before. And, it makes you confront the corrosive effects of Parkinson’s Law on your business.
You work hard in your business and you deserve a profit for your efforts. You do not deserve to have poor planning, sloppy work, and indifference of your employees run up costs and eat away at the profits of the business.
At Exigo Business Solutions we are Profit First Professionals. Our passion is to help our clients maximize their business profits from day one. The first step is to set up several different bank accounts to segregate profits, owner’s pay, and other funds. The next step is to use the results of your bookkeeping to drive your business decisions. Here is where QuickBooks, QuickBooks Custom Reports and various intelligent business applications come into play.
What you want from your bookkeeping is an accurate overview of your finances, a highlighting of important details, and an overall actionable reporting structure. How to get your books in shape and maximize your profits is to work with folks like Exigo Business Solutions in the Kansas City area to get your bookkeeping and accounting up to speed. Then, to maximize your profit, you need to look at your profit as your right for all of your hard work and not the possible gains from winning the lottery! Using QuickBooks and the Profit First method gives you the way you need to maximize profits now and for years to come.
When you work hard to start and maintain your small business you do it with the hope for a better future. When all of your work does not result in a reasonable profit or even in losses, it has an effect on your spirit. That effect on your spirit is an even more corrosive effect caused by Parkinson’s Law than the effect on your profits. Monetary losses can be replaced but a broken spirit can be devastating.
At Exigo Business Solutions we are in the business of making your business work. We remind each and every small business owner that profit is a right for your planning, investment, and hard work. We can teach you the methods and show you the tools for keeping your finances in order, managing cash flow, and budgeting effectively.
With a system that works and profits from the very start, you will find your mindset improving and your spirit regenerating. That is your right, so get going and get on the right path to getting your books in shape and maximizing your profits today.