When the ultimate responsibility for the performance of your business falls on your shoulders, time is precious. Many business owners find themselves juggling a demanding mix of obligations to keep their customers satisfied, their bills paid, and their taxes filed. As a business grows, these demands become more numerous and complex.
New and unexpected problems will arise! That isn’t some kind of gloomy prophecy. It is a simple fact of life and business. As business owners learn to adapt to disruptions in their industries and personal lives, they find their available time slipping away. Naturally, when time is short, the most urgent tasks must take priority. Nothing can claim our time more suddenly and completely than the unexpected.
The unfortunate truth is that many business owners allow financial management tasks to take a backseat to other needs that seem more urgent at the time. And it is true that good financial accounting practices take time to learn and implement properly. However, there are several ways that such practices will save you time now and in the future.
For instance, business operators who neglect their Profit & Loss Statement engage in accounting as a last-minute chore. If you have ever had to scramble to file your taxes on time or complete inventory counts, you understand how playing administrative catch-up can steal away hours of your life. Properly implemented reporting processes and consistent follow-through can save you time and labor in the long run.
More importantly, good, up-to-date financial accounting will save you time by enabling you to make better, more informed, and efficient decisions. The way you collect and organize your financial performance metrics, and how you interpret those numbers, can have a significant impact on the health of your business and the time you spend managing it.
Financial accounting is more than just a report card for your business. It is a database of actionable data that allows business operators to be more adaptable and sure-handed.
A business owner has to be ready to make tough decisions. By “tough,” I mean difficult decisions that directly impact the health and success of their business. Some of these decisions are intrinsic to running a business, such as setting your prices. For most businesses, price setting is a constant concern, especially as various costs increase and demand fluctuates.
For example, we have seen significant price increases in raw materials and labor over the last few years. When costs rise dramatically enough, operators have to adjust their own pricing in order to remain profitable and competitive.
Business owners with thorough accounting data and the ability to understand it have a major advantage when it comes to setting prices. When you know the profitability of each product or service you offer, you are able to make price adjustments with confidence in your continued ability to turn an operating profit. Conversely, when you don’t have detailed visibility of your business performance, pricing decisions can be stressful and time consuming.
Difficult decisions can also follow in the wake of an unexpected expense. For instance, a company that manufactures a product may reach production capacity when there is an unexpected spike in demand or when a piece of equipment breaks down. In this scenario, the business owner must address their production shortage, but the best path forward may not be clear.
Should the business owner pay for repairs that may only get them through this busy season? Should they take out a loan to buy brand new equipment and increase their production capacity? If a business loan is needed, how prepared are they to apply for that loan? When any kind of unexpected expense arises, financial awareness gives business owners and operators the ability to make better decisions, faster, with more options available to them.
Your Profit & Loss Statement was not built in a day—at least, it shouldn’t have been. When you track the movement of money in and out of your business, there are thousands of data points to collect, classify, and organize. This can be overwhelming! However, consistent, repeatable processes for reporting can simplify your administrative workload. This matters because it saves you time and it provides you with up-to-date financial statements all year round.
For instance, many Advantage Insights clients use Dext, a mobile app that collects and stores information from their receipts. Other ways to automate reporting functions include QuickBooks software integrations that can be set up to feed your financial database.
Another area where consistent, repeatable processes can reduce administrative obligations is in Accounts Receivable. Depending on your business, bill collection may be a constant challenge. Aging receivables (money you are owed) demand regular attention as you work to make sure your business is paid for the products or services it sells.
Advantage Insights helps its clients put thorough collections procedures in place to make sure invoices are paid and customers know to expect follow-up communication on unpaid balances. Those processes, carried out fairly and consistently, save companies time pursuing owed balances and keep them from missing out on payments altogether.
I work with select clients to institute direct deposit payments, especially for their repeat billing accounts. When this solution is available, it saves time and hassle for my clients and their customers. Invoices are paid on time, automatically. Financial statements are updated in real time, automatically.
Whenever possible, we implement automatic processes for payroll as well. Payroll is yet another aspect of business that becomes increasingly complicated with growth! Full time employees, hourly staff, and private contractors each have their own rules and regulations that businesses must adhere to in employment. Not to mention the differences that exist across state lines.
Different employees have unique PTO plans, IRA plans, various benefits packages, and more that all require thorough reporting. Taxes must be paid consistently and correctly throughout the year, and there are serious penalties for businesses that fail in this regard.
Just like material prices, prevailing wages are subject to cost of living increases and market pressure. It is incumbent upon the business owner to make sure their employees are fairly compensated, or else they may lose valuable members of their team to higher-paying jobs. Comprehensive payroll and profitability data can help business owners make difficult personnel decisions regarding hiring, firing, promoting, and wage adjustments.
Most small business owners make tremendous sacrifices of their time and effort to ensure success for their companies. But we don’t always know how success can transform a business. With growth, the stakes are raised and operational complexities emerge. Business owners find themselves hurriedly responding to the administrative demands of financial management, losing lots of time and their ability to leverage that information well.
Overwhelming demands on time hurt a business operator’s ability to manage and make sound decisions. Dwindling time and burgeoning uncertainty have a way of making us miserable in our personal lives as well. But the good news is, running a business doesn’t need to leave you exhausted. Advantage Insights offers solutions to these challenges that demand your time.
No two businesses or operators are alike. That is why Advantage Insights develops financial management solutions that are tailored to the unique operational challenges of our clients.
For businesses adapting to the numerous and complex challenges of growth, we offer the Progressive Growth Package. This service is our most popular financial management tier, offering high-detail reports and continuous engagement through reports and consultation.
Whether managing your business has become unwieldy, or you simply want to know more about your financial performance, Advantage Insights offers services that can address your needs. Get started with a free consultation, contact us online, or call Advantage Insights to find out more.