How to be more in control of your financials
Good business managers spend a significant portion of their time solving business problems. In my experience, things that can go wrong usually do at a time when you just don’t need them to. You will never be able to spot a problem if you don’t know what to watch out for. It is unacceptable to employ managers who are not good at resolving problems.
Good financial controls are critical to the successful management of any business. Think of financial controls as a sentries that sound the alarm when a financial problem occurs. Financial controls go hand in hand with the reports produced by small business accounting software. You have to be able to do side by side comparisons of period versus period or budget versus period and for this you need to make sure that your small business accounting software can generate the right reports. You should think through the critical numbers and ratios you need to review on a regular basis, keep it simple to begin with and then design the reports around them.
Vigilantly keep an eye on the margin on sales and don’t hesitate to investigate any changes regardless how insignificant they might be. Changes in margins or volumes in businesses that sell large numbers of products are especially vulnerable and losses can mount quickly if the causes are not quickly understood and addressed. Never take your eye of the fixed expenses of the business in the early part of the year and make sure they follow the budget. The Average number of days it takes for your customers to pay you should be monitored closely and you can do this be running the Debtors report in your small business accounting software.
Experience is the way to learn and over time you will learn which financial controls should be highlighted in your accounting reports, just make sure you have the right small business accounting software that can generate these.
This entry was posted on Sunday, July 26th, 2009 at 12:10 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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