Too many small businesses have money coming in from sales but no real profit. The usual assumption is that the cost of doing business is too high and that the business is doomed to fail. This does not have to be the case. A business that uses the Profit First method of bookkeeping will put aside profit on a regular basis and control expenses. Here is how to control your small business expenses from day one with help from Profit First Professionals at Exigo Business Solutions.
Profit First starts with a simple formula, Sales minus Profit equals Expenses. A portion of sales is allocated to profits with each bookkeeping cycle. The most obvious part of this approach is that a small business will be putting aside profits right away and on a regular basis.
How does Profit First help control expenses? There is a deeply entrench tendency in an organization to waste time and money. But, it is not seen as wasteful and thus the tendency saps the strength of a business while going virtually unnoticed. Years ago a British writer and former civil servant wrote about this tendency. He wrote, “work expands so as to fill the time available for its completion.”
In other words, give a person or group in your business a task and a deadline. And, more often than not, they will finish “just in time.” The same applies to setting a budget for running part of your business. Those in charge of spending the money will use up every cent of the budget. But, how does the Profit First system address this issue?
Not everyone uses the Profit First method of keeping books and running a business. But, those that do use it are like Exigo Business Solutions. Our first and foremost business goal is to make your business more profitable. We help you improve your budgeting and your cash management. And, of course, with Profit First, you are routinely banking your profit.
We use QuickBooks, the best small business bookkeeping and accounting software. This is one of our areas of expertise and we offer QuickBooks ProAdvisor Services to our clients. A key aspect of this service for our small business clients is the QuickBooks custom report. This is a critical part of how to control your small business expenses from day one.
The idea behind custom reports is not just to report the numbers. The point of getting a financial report is to be able to see the big picture of your business, each and every important detail, and how these details relate to the big picture.
With QuickBooks custom reports and the help of our Profit First Professionals, you will be able to see where you are spending too much money on various aspects of your business and where your employees are spending too much time. The simplest part of controlling expenses is that many times you can simply assign a task with a shorter time frame for completion or a smaller budget.
QuickBooks has lots of reports that can help you manage your business. Because our team of QuickBooks ProAdvisors has a lot experience, we can tailor these reports to precisely fit the needs of your business. The bottom line is that when you have a better financial understanding of your organization, this is how to control your small business expenses from day one or starting from right now.
The point of getting excellent financial reports is to cut the fat out of your business. However, a good financial report in the Profit First system will also show you where to increase staffing and increase funding for better profits!
You have a successful business because you know what you are doing and because you put your heart and soul into your work. But, you are probably not a bookkeeper or accountant by training or trade. So, how to control your small business expenses from day one is to outsource your bookkeeping to someone whom you trust and who has the expertise you need. The Profit First system works because we use all of the tools that it offers. For example, we have you set up multiple bank accounts and advise you as to which banks to chose. When paying off loans, there is a Profit First method for paying off debt. And, with Profit First, we show you how to determine real revenue in your business.
If you want to get control of your small business expenses and maximize your profits, contact us at Exigo Business Solutions for a free analysis of your financial situation.