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What is an excellent company? What are the features that identify business excellence? Whether we want to achieve this degree of excellence or identify large companies to work with, what are the values ​​we have to take into account?

Axesor marketing intelligence believes that there are at least five factors that we can take into account when assessing the type of companies with which we do business with. We will discuss the five pillars of excellence below.

Financial Management

Good financial management raises companies high above their competitors.  This includes account profitability, risk, and stability beyond the short term.

By comparing the structure and evolution of a company’s income statements, in addition to other key indicators, excellent companies can be determined and compared with others based on their commercial segment and sector.

Thus, the most healthy, stable, and with less risk of default societies are identified. These are truly attractive entities when proposing new commercial agreements.

Management of Human Resources

Over time, the staff of a company becomes one of its defining features. Therefore, in order to locate an excellent company in its management and organization of human resources, it is essential that it has an efficient composition of employees.

The distribution of the number of employees in different departments and the volume of expenses that it presents are some of the key factors in this regard.

Innovation Capacity

The innovative capacity of companies is also a pillar of excellence because they can face new challenges efficiently and identify new possibilities to increase their business.

In order to locate the companies with the highest degree of quality in the field of innovation, it is important to properly assess their investment in R & D & I and new technologies to weight this absolute data as well as the productivity ratios resulting from these investments in comparison with those of the competition.

Degree of Leadership

Larger companies are not always the most profitable in terms of business since a company with a large volume of profits does not ensure excellent management.

However, the position of a company in the market itself can possibly determine to what extent we are interested in them becoming a client.

To establish this degree of leadership, we must take into account the results, both in turnover and market share, which allow us to segment the entities depending on their level of activity within their geographical and sectoral scope.

Import & Export Capacity

Finally, finding stable companies means locating those that diversify their activity in different geographical areas and are not very dependent on specific local situations.

The capacity of an entity to carry out imports and/or exports depends on factors such as financial results, physical location of the company, or the business to which it is dedicated to.

These and other indicators allow you to calculate both the health of your foreign commercial activity, if any, and the possibilities of carrying out quality business in the future.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooks™️ ProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Businessman being depressed by accounting in his office
Accounting and bookkeeping are the key jobs in any business. Accounting is the systemic and complete recording of financial operations in a business. Business bookkeeping is the recording of financial dealings as a part of the accounting process.

Small business accounting errors range from minor errors to big accounting and bookkeeping errors which cause grave danger to the business. Accounting problems start with irregular bookkeeping and accounting. This will not give a true picture of the business and no good decisions can be made. Entrepreneurs/owners often do not realize that common small business accounting errors are a major threat to the growth of their business in the long run.

Here are some common accounting errors that actually damage the businesses.

NOT USING AN ACCOUNTING SOFTWARE

Manual work is always the toughest and is at risk for errors. A small accounting error can lead to big damage in businesses. Small and medium-sized businesses should use an appropriate accounting software according to the type of business they run. Cloud accounting is an emerging technique in accounting software and has its benefits in small to medium-sized businesses. 

Manual accounting is time-consuming and the chances of errors are much higher. While using an accounting software not only diminishes the chances of errors, the software also take much less time for accounting operations.

Choosing an appropriate software is an important and challenging step in business according to your needs. You should consider its cost, usability, and extra features when choosing a suitable software for your small business.

Features of an accounting software must include

  1. Inventory management
  2. Sales tracking
  3. Contacts management and contact history following
  4. Account to accept credit card payments
  5. Producing invoices
  6. Financial statements, cash flow statements, and balance sheet,
  7. Budget planning
  8. Payroll
  9. Taxation matters

INFREQUENT BOOKKEEPING

Bookkeeping and accounting statements must always be kept up to date in any business. Running behind in bookkeeping and submission of entries of the expenses or sales will not produce an up to date picture of the business and allow you to make timely decisions. It can lead to a negative balance if expenses are made but an income statement is not updated. Invoices that have not yet been paid by the company may go unnoticed and it can lead to a bad reputation for a company. It can end terms with your suppliers. Business growth is ceased or significantly reduced. Not producing financial statements monthly is common in small business accounting problems.

MIXING PERSONAL FINANCES WITH THE BUSINESS ACCOUNTS

  • Business owners combine their personal cash with business expenses. It is of utmost importance to keep the personal finances and the business finances separate. If these two finances are not isolated then it cannot be known what was planned for business and what was consumed personally. The amount of profit that was produced out of the invested capital cannot be assessed properly.
  • A business credit card is operated for personal expenditures during a holiday trip or other payments. Later on, this sum will be funded from the company’s income which is a bad idea.
  • During purchase orders for inventory of the company, procurements are also made for private use.

COVERING SMALL EXPENSES IN A BUSINESS OUT OF POCKET

Business owners take it upon themselves to pay small expenses for the business out of pocket as it saves their time. However, these expenses are not listed in the business bookkeeping. The business looks stronger in income when this accounting error is done. While in reality, the business is not that strong.

INTERESTS ON DEBTS FOR MANAGING PAYROLL

Small to medium-sized businesses get loans at the time of monthly payroll. The income of the business ends up paying back the loans with interests. Sometimes, the debts increase as well as the interest on those debts. Businesses, instead, can get the services of payroll companies to avoid heavy long term loans.

CONCLUSION

Small business accounting errors range from minor errors to big accounting and bookkeeping errors which cause grave danger to the business.Accounting problems start with irregular bookkeeping and not using accounting software.

Check out America's Best Bookkeepers

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

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There are various factors in businesses that define its growth and sustainability. These factors drive profits for your business. These factors may be identified as business drivers.

Recognizing and watching the key drivers of your business is crucial to boosting up profitability.

How to Identify Key Drivers of a Business

A wide range of business driving forces exist as internal and external factors that affect the performance of a small business.

To identify the key economic drivers in your business, focus on the factors that:

  • Reveal the performance and growth of business
  • Can be measured or calculated
  • Can be compared to a standard, such as a budget or last year’s figures, or an industry average
  • Are in your control

Economic Drivers in a Business

Small business owners are always working hard to move forward and focus on bookkeeping and other business operations. But they accomplish their real success when they completely understand the crucial factors that drive profit in their business and then focus on those economic drivers.

The Four Basic Drivers of Profit

  1. Price
  2. Variable costs (depends on the production and sales. Increase with increase in production and/or sale)
  3. Fixed costs (also known as overhead. Such as salary of employees and bills to be paid every month.)
  4. Sales

Price is a key factor that, with a slight change in pricing, may affect the profit margin greatly. Increases in price immediately increase the profit margin. Many entrepreneurs focus on sales. Increase in sales volume, however, increases the variable costs. Increase in variable costs will lead to lesser profit if prices are not increased.

But, another factor is that decrease in variable costs increases profit margin but it will not raise the total revenue. Fixed costs have the least effect on profit.

Each key economic driver in a business’ economics is unique but each key driver is dependent on all of the other drivers. One cannot be affected without influencing the performance of the other. These key drivers are an economic force behind the business growth and profitability. Small business entrepreneurs/owners must interpret these drivers in relation to each other to make their decisions. Employees also need to understand the key drivers in a business as, in the long run, they think strategically and advance in their careers.

Maintaining a good gross profit margin is very important. If gross profit margins are falling, then focus on other key drivers that can affect profit margin to a downfall. There can be a number of reasons for a decreased gross profit margin. These reasons can range from input costs are more, too many discounts are being given, production is not up to the mark, or prices of production materials is increased recently. Take corrective action after the realization of the reason.

The Major Profit Mistakes of Businesspersons

  1. Entrepreneurs focus on increasing revenue through prospective customers and partially forget their existing customers.
  2. They do not promote their product and market the brand image so they often miss the chances to increase prices while their competitors do.
  3. Marketing is an investment tool. They cut costs on marketing and hence they cut investment in business virtually. Marketing attracts more customers.
  4. Increasing price of a product in comparison to another similar product with lesser price can affect the market share of the product.

Conclusion

Price, variable costs, fixed costs, and sales are key driving factors in a business. It is highly undesirable for a business to focus on one driver and not interpret the other economic drivers in a business. Strategic marketing of your product is equally and essentially important and will help to attract more customers and generate more sales and increased net profits. It will also build a brand image of your product and its price can be increased to increase the profit margin. Make decisions in strategic ways that will upsurge the business in the long run.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Person using a futuristic head up display (HUD) interface screen with data and key performance indicators (KPI) for business intelligence (BI) analytics, concept about financial dashboard, technology and virtual reality (VR)
Financial dashboards for businesses are essential for evaluating daily business operations on a regular basis. Financial dashboards guarantee to keep the business on the right track. It is one of the most vital elements of any business. Businesses may use various techniques to invest in a proficient financial management program to ensure that the best practices for proper inventory management are followed.

Financial management is a major part of any business’s supply chain management, manufacturing, customer relations and every business activity. The stock inventory management aims to have the correct products available for sale. Tracking inventory in real time is effective in streamlining the entire operations process.

The dashboards help the business to have the correct products available at the right time. It prevents out of stock products and funds from being tied up in surplus stock. Moreover, stock inventory management helps your business ensure that all products are sold in time to prevent spoilage. It also saves millions.

Benefits of a Financial Dashboard

Financial dashboards provide a complete and detailed overview of an income statement with net profit, revenue, and other relevant performance ratios. Each dashboard represents four crucial financial indicators such as the operating profit, net profit margin, OPEX ratio, and gross profit margin.

The revenue is found in determining the selling price by calculating the total cost of goods sold without including details considering any other taxes and expenditures. The dashboards allow businesses to consider certain costs associated with their operations on a daily basis for bookkeeping.

One of the main metrics for these dashboards is the inclusion of income before interest and taxes or EBIT. The dashboards consider calculating all expenses and costs before interests; then the applicable taxes are included in the overall cost to determine net profit.

Calculation of Gross Profit Margin by Dashboard

The Gross Profit Margin for any business is essential for determining the total sales percentage with the revenue that remains after the bookkeeping of all direct costs with goods and services. The gross profit margin is useful in estimating how much the company has to invest, determines spending on research and development, and how effectively they can contribute towards earning a profit.

Top 3 Financial Dashboards for Your Business

Entrepreneurs are preoccupied with daily business operations and, often, they do not have sufficient time left for handling their finances. Many financial dashboards are available to help business owners effectively handle their finances. Most dashboards offer easy to read charts with colorful graphics. The most effective step for start-ups is to use online dashboards that help them track their finances as they are unable to hire an expert bookkeeper to manage business finances.

Here are some affordable business dashboards that will determine how to handle the finances of any business.

inDinero

inDinero was launched in 2010. This financial dashboard is suitable for start-ups. inDinero gathers all business transactions from the bank history as well as credit cards details and other financial documents are efficiently organized. The business owner does not need to spend hours in data entry. Just save the account number and bank information and it automatically categorizes transactions. Some of the categories of transactions are:

  • Advertising
  • Payroll
  • Dining and refreshments
  • Another spending for every month
  • Accounting reports

BodeTree

BodeTree was introduced as a financial dashboard in 2011 in partnership with Intuit, the company that launched QuickBooks. BodeTree relies on QuickBooks to assess different financial information from those who rely on QuickBooks for bookkeeping. It needs to be connected to the QuickBooks account. Once the connection is complete, it categorizes and generates a breakdown of all activities and expenses associated with each operation.

The BodeTree dashboard is named after the legendary Bodhi Tree, where the Buddha reached nirvana. Similarly, the dashboard will be able to determine a benchmark for the business depending on their algorithm based on the transaction and expenses history.

Corelytics

The Corelytics financial dashboard was launched in 2005; this dashboard works by importing all of the financial information associated with the business. It gathers information from different accounting programs including Sage, PeachTree, MYOB, and QuickBooks, among others, for the financial dashboard. After all of the information from each accounting platform is collected, Corelytics will get to work by categorizing every metric. These metrics, once generated, can monitor every transaction. Some of the metrics are:

  • Expenses
  • Gross margin
  • Revenue
  • Receivables
  • Owner compensation
  • Profits

Financial dashboards allow setting goals and objectives for each of the metrics above. The Corelytics financial dashboard highlights every single metric with different colors. The colors determine when each metric is not performing according to the standards of the business. This financial dashboard is one of the most useful for every business. It comes with a mobile application, allowing the business owner to monitor the activities on the move for better bookkeeping. It also won the Showcase award for the best dashboard.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Young smiling black businesswoman at the wall with stickers communicating with her colleagues. Mixed team of entrepreneurs
Following are 7 ways that you can ensure the success of your business:

1. Write Down a Business Plan

The first step is to write down a plan. Without a written plan you cannot dream of success. The written plan should not be long. It should focus on a few critical points. These points include budgeting, long term and short term financial plans, objectives and goals, sales and marketing strategies, and the source of finances to run the business. 

Your time can be turned into money by initiating a written plan. When and how you achieve your goals is defined by this plan. Your daily step by step actions determine the progress of your business. Depending on the progress, you can make required changes into the written plan.

2. Adjust the Plan and Triumph

The written plan does not have to be written in stone. Think of this, if even a successful military general can burn their plan and go with the flow, then why can’t a business owner? Review the progress and achievement of your goals as planned and make necessary adjustments if satisfactory results were not earned. Don’t ever marry your written plan. Adjust and win the game. What particular market statistics and market value will be helpful in adjustments?  Be flexible, take critical notes, and make any changes necessary to your written plan.

3. Take Bits of Advice

Egos can wreck havoc over you if you prefer them to other valuable things. This is true for business life as well. A business owner should listen to advisers and other team members. They may have better ideas than you. Your weaknesses may destroy your business if you take them personally and don’t work upon them. When and if you’ve made an error, admit it and carry on.

Advisers are always beneficial to your business. They are the people who assess your progress and work. They highlight your mistakes and make you accountable. Listen to them, they will push you towards greater achievements. Be honest with yourself and keep your ego in the pocket. Your business is more valuable than your ego. Be calm and react rationally to criticism. Learn a lesson and stick to your commitments. This way, no one can stop your business in succeeding.

4. Manage and Organize your Team Effectively

Know all of the employees of your team and clearly define their goals in writing. Assess their progress daily and train them to achieve their goals with consistency. Make decisions according to the daily performance of all team members. Your team is an asset for you.  By utilizing this resource, you can succeed.

5. Effective Organizational Structure

The organizational structure of your business is critical for success. Some business owners try to control each and every function of their employee themselves. Avoid the trap of micro-managing.  This style of management decreases the efficiency of the employee. By doing this, your employees won’t take ownership in their work and they will also never learn. But when you delegate to employees, the results are overwhelmingly excellent. Provide all employees the goals designed for them in writing and train them sufficiently for achieving these goals effectively. Your employee will then feel free to work in his/her own way and will get involved fully in tasks assigned to them. 

Review achievements of each employee and reward them accordingly. Reward systems keep employees motivated and this management style leads to success.

6. Use Technology

Create social media pages to attract customers. Social media has proven very cost effective in marketing. Few skills and training are required to use this media for efficient marketing and progress in the business.

7. Reinvent Business

Separate yourself from your past history and create a new competitive advantage, be it a focused niche or super service, but not by discounting.  Research the ways of successful businesses and take that, along with your own creativity, to introduce a unique business that will attract new consumers.

Conclusion

By using the above mentioned suggestions, your business can succeed. The sensible and logical way will always work, along with a little creativity and hard work.


Check out America's Best Bookkeepers


About Complete Controller® – America’s Bookkeeping Experts
 Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Photo of various stacks and rows of coins isolated on white with INVESTMENT concept related words imprinted on metal surface
Reducing overhead expenses can be tricky as modern business has many new aspects to handle. However, for it to make a difference, saving costs matter greatly. To be able to contribute beneficially to all commercial endeavors, arresting any unwanted or unnecessary costs is the key to good management skills. In the global markets today, being cost-effective is definitely a magnificent step.

 8 Strategies for Reducing Overhead Expenses

  1. IT Resources And Its Costs

IT resources can eat up energy, so being energy efficient and reliable are two things that are mandatory for modern IT shared resources like printing and email. Switching to equipment that helps things run with low costs is highly advised. Large screens consume more electricity and so does an older version of motherboards and drives. The latest technology allows more cost and energy savings. For example, converting your business needs to cloud computing is a little costly but, once implemented, it saves many resources and is always feasible in the long run.

  1. Reducing Overhead Expenses with the Internet

Using internet telephony is a marvelous way to save on business communication costs in the shape of reduced phone bills and other expenditures incurred for different services that are offered on a mandatory basis by the phone company. And, living in the 21st century, it’s wise to utilize all that is available.

  1. Monitor Payment Services

Some banks deduct charges from the merchant account. If that increases and the turnover isn’t worthy of it, stop using it. If sales are poor and the only sales that do occur are online payments, that means partial profits. For reducing overhead expenses, insist on cash wherever applicable.

  1. Daily Vital Activities

The digital era has turned offices paperless. Vital daily correspondences, for example, between vendors and field agents like engineers, for specific material requests can be conducted and stored as PDF on digital storage media much easier as compared to printing paper for a file. Having a centralized database of correspondences would be a good idea if the situation is as described. However, other expenditures such as electricity and heating expense must be supervised. Employees who wish to work from home are welcomed to do so, reducing overhead expenses, cutting utility charges, and other related expenditures. Even on premises, make sure an advisory system of politely requesting all equipment to be placed in standby mode to become more cost-efficient. Avoiding high frequency lighting and providing energy efficient light such as low energy bulbs offer a significant sigh of relief when billed.

  1. Outsourcing

Some businesses require minimized accounting or IT services which can easily be received by consultants or service providers. By outsourcing such departments, businesses can benefit with employing interns or freelancers. Temporary staff is effective for specific projects. Businesses like vending or merchandising eradicate the need for mass training of staff and help in reducing overhead expenses. 

  1. Outdoor Calls

Traveling for campaigns requires cost-effective methods such as using teleconferences instead of taking a team of marketing whizzes on a three-day product introduction workshop. Using business tools for communication like Skype should be the first mode of all such conferences. With technology and the evolution of the web, it’s a smart business tool that is always an influential ally of a business. Traveling lightly or traveling only on essential trips that are necessary help to economize by reducing overhead expenses. 

  1. Business Gatherings

It is always a great idea to know business contacts but it’s even smarter to form joint venture partnerships. Some businesspersons welcome such projects and, with the experience it provides, the portfolio of a business shines bright! Sharing projects leads to consortium which helps provide an influx of revenue while sharing tasks between entities. This approach is rampant in construction, oil and gas, power generation, etc. This practice leads to win-win situations which are of mutual interests. Carrying assigned tasks per project description helps in reducing overhead expenses on both sides, while delivering quality and ensuring a greater profit.

  1. Smart Decisions – Buy Versus Rent

Some business owners have to deal with this often. Renting versus buying; which is better. It’s always a great idea to procure small equipment like pumps, which are easily handled by trained staff. It’s a little more difficult with high power industrial pumps which can be rented in dire circumstances. But, it’s always preferred that the continuously needed hardware should be purchased.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Businessman looking down at the falling red arrow destroying a concrete barrier. Collapse and drop. Fall and depreciation. Regression and deterioration. Crisis.
Small and medium-sized enterprises (SMEs) have an essential role in the private division of each country. Furthermore, as globalization has risen, they began to have a very significant role of opening the local products/services to the global markets, as well as contending with multinational opponents in the local markets. In the process of internalization, there appear to be numerous pros and cons for SMEs in the global market. The advantages of size, flexibility, and rapid response to changes allow SMEs to prosper. On the other hand, the disadvantages of size may provide SMEs different paths in the globalization phase. The features that will provide SMEs through internalization differ from one country to another based on the economic, geographical, and cultural variances.

The crippling outcome of poor cash flow on SMEs has been identified as one of the most critical issues facing companies today, according to business groups including the Federation of Small Businesses (FSB). Even profitable companies with proper bookkeeping can, at times, suffer liquidity difficulties that cause them to be unable to invest in growth and development. Slow-moving growth for small businesses in recent years is one of the reasons why the UK’s economy remains stagnant and there are a few signs that significant national growth is coming any time soon.

Top 10 Causes of Failure in SMEs 

Cash flow issues

Small companies that should have no liquidity concerns can find themselves struggling due to poor cash flow management.

Lack of knowledge about the marketplace

Small business holders get carried away with their desires and fail to stop to do the suitable research about their challenges, demands, customers, and the market.

Lack of liquidity

Lack of wealth can reduce choices as far as expansion is concerned. The lack of liquidity and bookkeeping caused by bad debt and failure to collect accounts receivable can eat into the day-to-day operations and flow of cash that is used to run the enterprise and allows it to trade.

Faulty people

If the industry takes on an individual who’s morals are not in line with the purposes of the business, this can thwart growth and stunt productivity. When considering taking on someone new, try to find a way of cooperating with them before formalizing problems into something more concrete.

Lack of financial understanding

Often people and small groups are obsessive about their idea but lack the necessary financial understanding along with bookkeeping needed to entirely appreciate where the business stands financially at any given point.

Not having a plan B

Making substitute preparations and having countermeasures in place should anything go wrong will mean that you are well prepared to handle anything unanticipated. Yet, many small business fail to do this.

Money is king

Emergency budgets and placing profit back into your business can help to finance any unforeseen costs and allow tractability as well as subsidiary plans for steady growth. Small commercial owners usually fail to see the prominence of doing this.

Failure to react to change

The slightest changes to the market, opponent’s activities, and sometimes influences which seem completely unrelated can cause changes in demand. If companies fail to react to these changes, this could harm repute, cost time and money.

Incorrect pricing

Whether you under or over estimate the cost of your merchandise, incorrect pricing or bookkeeping is a sure way to not gain the most out of your company.

Unrealistic anticipation of cash flow

If you give a client 30 days to pay and then plan around them paying within 10, this is impractical. The more honest you are with yourself about your cash flow, the less likely you are to find yourself in hot water.

Conclusion

Market liquidity risk is an imperative driver of security prices, risk management, and the speed of arbitrage. Funding circuits for small businesses stay largely local, imitating proximity effects between small businesses and their investor base. Liquidity crisis evolves through liquidity spirals in which losses, increasing limits, tightened risk management, and amplified instability feed on each other.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

 

 

 

 

 

 

Business team discussing interface of new mobile application
A fine financial management structure depicts how an entrepreneurship business is doing and why. A well-organized system for bookkeeping is critical to establish procedures to manage and control finances. Financial management is the system to place digits to work for a successful business. Financial management is used to formulate the decision that improves business operations and make it more successful.

Advantages of Financial Management

Financial management makes you a better macro manager. These are the advantages gained if you ace financial management:

  1. Turning your business with proactive management.
  2. Debts for business are easily approved.
  3. Quick formulation of an efficient financial plan for sharing with investors.
  4. Accessibility to good tools for making critical financial decisions.
  5. Investing money on fixed assets wisely.
  6. Efficiently maintain inventory and accounts receivable, develop working capital for short-terms.
  7. Clear knowledge of growth orientation and setting goals for sales.
  8. Improvement in margin of gross profit by effective pricing of your services and cutting the effective costs of direct labor, supplier prices. All of these measures affect costs of products.
  9. Cutting down of administrative expenses and general costs plus a more efficient business management.
  10. Planning for taxes.
  11. Planning in advance for worker settlement.
  12. Executing sensitivity analysis with the diverse fiscal variables involved.

Developing a System for Financial Management

The first step is to create the financial statements. For proactive management, you need a plan in which a monthly generation of financial statements is done. This statement needs to include:

  • Income statement
  • Balance sheet
  • Cash flow statement

All of this information can be extracted from bookkeeping, invoices, bank statements, and invoice receipts.

Master Financial Business Management with these 6 Tips from the Best Entrepreneurs

1. Profit Doesn’t Characterize Success

In financial management for entrepreneurs, profitability doesn’t indicate success. Rather, growth indicates that a business is excelling and on the right path. Profit is the ultimate goal for sound entrepreneurs but growth of the business is critical to determine how the business is doing.

2. Identify what Metrics Affect the Business

Identify the financial metrics which are universal and applicable to every business. Closely look into your specific business and identify specific metrics that affect your particular company. The universal metrics are revenue, operating expense, money on hand, gross margins, etc.

3. Don’t Drop Capital on Dumb Mistake

Efficient bookkeeping will help you in assessing your mistakes and where you are losing money. Identify all of the areas where money wastage is avoidable because early profits are more worthy in entrepreneurship.

4. Carry Out a Cost Review

An audit of the business should be done because you cannot monitor all of your employees all of the time. This should be done at least quarterly to have a close look on your expenses and how to justify them.  Audits also reduce the risk of fraud.

5. Make your Time Count

Entrepreneurs have to do many tasks themselves due to small budgets. They have to maintain bookkeeping, run payrolls, etc. Entrepreneurs do things themselves to save money but, in reality, this time should be spent in growth of their business. Use technology to save your time.

The monthly financial statement can be generated through the latest automated software package especially designed for accounting. These are to be used with your manual bookkeeping system. To save your time, you can also employ internal or external bookkeepers to provide you with monthly financial statements.

6. Build a Method to Track Success with Time

Every entrepreneur must have a system to assess success over time. This system is used to validate the financial management system and to reset goals, if needed.

Conclusion

To grow a successful business as a sound entrepreneur, you must have a deeper understanding of your financial management system. Sabrina Parsons, CEO of Live Plan, believes “budgeting, forecasting, and planning are not just for start-ups. If you do this for an ongoing business, you’re going to grow 30 percent faster, you’re going to be more successful and your numbers are going to mean more.”

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

 

American businessman holding a suitcase while flying with clouds shaped upward arrow
Growing your business is a tough job. You have to look for appropriate ads, content, UX, conversion, email capture, newsletters, SEO and social media. It can all become a huge, disordered heap of growth strategies that leave you confused with no end goal in sight. A growth strategy includes more than simply foreseeing long-term success. If you don’t have a perceptible plan, you’re truly losing business or you’re increasing the chance of losing business to contenders.

The key to any growth strategy is to be deliberate. Figure out the rate-limiting step in your growth and pour as much fuel on the fire as possible. For this to be advantageous, you need to take the following steps:

1. Institute a Value Proposition

For your business to withstand long-term growth, you must understand what sets it apart from the opposition. Ascertain why customers come to you for a product or service. What makes you relevant, distinguished, and credible? Use your answer to explain to other customers why they should do business with you.

2. Identify your Ideal Customer

You got into business to solve a problem for a certain audience. Who is that audience? Is that audience your ideal client? If not, who are you attending to? Pin down your ideal purchaser and relapse back to this audience as you adjust the business to arouse growth.

3. Define your Key Indicators

Alterations must be quantifiable. If you’re unable to measure a change, you have no way of knowing whether it’s operative. Identify which key pointers affect the growth of your business and then dedicate time and money to those zones.

4. Verify your Revenue Streams

Once you identify the probable for new revenue streams, ask yourself if they’re sustainable in the long run. Some great thoughts or cool products don’t necessarily have revenue streams attached. Be careful to isolate and understand the modification.

5. Look to your Competition

No matter your business, your opposition is likely excelling at something that your company is struggling with. Look toward similar companies that are growing in new, innovative ways to inform your growth strategy. Don’t be afraid to ask for advice. Ask yourself why your contenders have made alternate choices.

6. Focus on your Strengths

Occasionally, concentrating on your strengths rather than trying to improve your weaknesses can help you establish growth strategies. Reorient the playing field to suit your strengths and build upon them to grow your business.

7. Invest in Talent

Your employees have direct interaction with your customers, so you need to hire people who are motivated and inspired by your establishment’s value proposition. Be cheap with office furniture, marketing budgets, and holiday parties. Hire few workers, but pay them well. The quality ones will usually stick around if you need to cut back their compensation during a slow period.

8. High-ROI Acquisition Growth Strategies

An acquisition is the most significant yet most expensive aspect of your growth, in terms of both budget and time. Ads aren’t cheap and ad platforms are abundant. Targeting the right audience in the right place with the right budget seems like an impossible task to start with, much less actually designing the ad.

Conclusion

You need to adapt your plan to smooth out your business’s inefficiencies, improve its strengths, and better suit your customers. Your company’s data should lend itself to all of your strategic decisions. Specifically, you can use the data from your key indicators and revenue streams to create a personalized growth plan. That way, you’ll better understand your business and your customers’ nuances, which will naturally lead to growth. A one-size-fits-all strategy implies vague indicators. But a specific plan is a successful plan. When you shape your growth strategy to your business and customers, you’ll keep your customers happy and fulfill their wants and needs, which will keep them coming back.

Developing a growth strategy isn’t a one-size-fits-all process. In fact, due to changing market conditions, making strategic decisions based on someone else’s successes would be foolish. That’s not to say that you can’t learn from another company, but blindly implementing a cookie-cutter plan won’t create sustainable growth.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

 

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The term Business Intelligence (BI) has lost its charm due to excessive overuse. However, its ability to upsurge the growth of a company remains the same. This article covers business intelligence from multiple aspects such as people, processes and technology. The focus remains on the importance of businesses intelligence for businesses of all scopes and sizes, and how BI can help businesses drive performance through top of the line BI solutions.

The majority of businesses still do not have complete knowledge about business intelligence, its significance to drive organizational performance, and its benefits. As a business, it is critical to utilize Business Intelligence tools in the best way possible so that you can effectively transform the collected raw data into useful information. This will help you not only make better and informed decisions about your business but drive increased revenues. Make use of appropriate tools and solutions in this data-driven industry where everyone is looking for ways to gain a competitive edge over others. If you think that investing in BI tools is an unnecessary expense, you are wrong.

With Business Intelligence, you seek newer opportunities to achieve success in the short or long run. In case you are still not convinced, we have compiled a list of eight ways that BI can drive your organizational performance.

QUICK AND IMMEDIATE ACCESS TO BUSINESS INFORMATION

As a business owner, there are situations where you have to make important business decisions on the spot. These decisions are time critical and it is important that you make the right one. This is only possible if you have access to the right information, which is beyond plain numbers in a column. Develop a clear understanding of what those numbers mean for your company and its success. BI solutions provide quick and immediate access to essential information with a single click.

ALIGNING PERFORMANCE INDICATORS WITH BUSINESS STRATEGY

It is important that your performance indicators such as your daily, weekly, and monthly tasks and goals be properly aligned with your business strategy. If you are not doing so, you are wasting your valuable resources, time, and money.

EMPOWERMENT OF EMPLOYEES WITH DATA ACCESS

Employees can effectively leverage BI tools and solutions to make data-driven decisions. Business Intelligence solutions provide people with real-time and relevant data. Thus, organizations can efficiently drive their performance using this information. BI tools also influence an employee’s growth creating a competitive environment within the organization.

SAVING TIME ON MAKING REPORTS OR DATA ENTRY

Before technological advancements, people used to perform manual data entry work which was prone to human error. As humans, we tend to make mistakes in simple copy paste tasks that consume a major chunk of our daily lives.

With BI solutions, your data entry and calculation tasks are automated, saving valuable time. You do not have to worry about generating a quick report or view data visualization to see where your company stands at that moment. In time you wasted on performing manual data entry and calculations, you can now see the results of how your business is performing to make profitable decisions.

HAVE ACCESS TO CUSTOMER INSIGHTS

BI solutions enable customers to have access to customer insights. If you are looking to drive your business forward, it is essential to meet the customers’ needs at all times. This is only possible if you understand your target audience along with their behaviors and preferences. If you are still not convinced how BI tools can give a boost to your business, it is not possible without implementing Business Intelligence. You do not have to spend hours looking at past reports to discover customer behaviors and patterns, let the software do its work.

GET YOUR SALES INFORMATION

The primary function of BI solutions is to get your essential sales information so that you know your strong and weak points. In case you are working with multiple sales partners, you can get access to information that evaluates the performance of each partner and how they can improve.

IDENTIFY AREAS FOR COST CUTTING

With Business Intelligence, you can significantly cut costs and other finances such as inventory. There are instances where your inventories exceed the usual demand. Not only are you spending extra money on acquiring the items you do not require, but also paying for their regular maintenance. BI software enables businesses to increase savings by providing information of areas where they can cut costs.

ENHANCE THE PRODUCTIVITY OF EMPLOYEES

BI tools significantly improve the productivity of an individual, department, and an entire organization. As a project manager or business owner, you can closely monitor the tasks and overall performance of your employees and teams.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.