Are your sales increasing, but your bank account balance is decreasing?
Do you have a shrinkage problem?
Are your sales too low or declining?
Are your taxes too high?
Are you labor costs out of control?
These are common business problems that can be difficult to correct. It is crucial to identify the root-cause of these problems so you can start on a path to recovery.
One of the most useful management tools at your disposal is your books! Up-to-date and accurate accounting data can help you pinpoint discrepancies down to the finest details. Graphical financial information and trend analysis can help point out issues at a glance that may go unnoticed in high-level financial statements -- such as shrinkage, lagging accounts receivable turnover, inventory management and labor costs.
Here a few ways you can help yourself:
- Lots of on-paper income and profit, but no cash -- Graphing accounts receivable and days outstanding by customer for the past 12 months might show you instantly where a problem exists. You may have to drill-down from your high-level information to find the detailed information to specifically identify the culprit.
- Employee theft or shrinkage -- How do you know if a problem of employee theft exists? Are your employees "hooking up" their friends at your expense? You can track cost inputs for various commodities, compare them to industry benchmarks, the look at monthly fluctuations (graphing can show these fluctuations quickly) to determine if anything is walking out your back door.
- Sales too low or decreasing? -- Who are your best salespeople? Are they still performing to the best of their abilities? You can track their performance in real-time and compare their results with previous periods and expected level.
- Taxes too high? -- Is your business set up to minimize income taxes? Some businesses might be able to take advantage of newly refined IRS code regarding S-corporations to minimize hefty self-employment taxes.
- Labor costs out of control? -- Analyze your payroll and financial statistics to ensure full utilization of your staff and determine where you might be able to increase efficiency or reduce employee hours by evaluating the effectiveness of every single employee.
These are only a few ideas to some of the problems facing businesses. Hopefully, we've stimulated your mind to attack these problems and get on the road to recovery.
If we can help in any way, please give us a call.
