Control your business and finances better
Why do some businesses appear to get so much more from their monthly management accounts than others?
Perhaps they have discovered that there is so much more to be gained if they can analyse their monthly accounts in such a way that they can exploit opportunities quicker and turn potential problems into competitive advantages.
Too many business people see accountants as a necessary evil. Someone they have to refer to once per year because the government insists that they keep accurate books and records so that the Inland Revenue can collect their tax.
In fact it seems sometimes that you are paying one person just to tell you how much to pay someone else. Where is the value in that?
Isn’t this a bit like paying an experienced sales person just to make the coffee or do the filing? Are you not wasting the huge amount of experience that your accountant has gained over the years? Seeing both success and failure, and understanding why the difference has occurred? Having both the qualifications and the practical experience to enable him to recognise both problems AND opportunities. This experience has to be priceless so are you using it?
Many small businesses prepare monthly accounts and gain a small benefit from doing so but as they would prefer to spend their time “doing what they do best” and do not wish to study for an accountancy degree they are not necessarily getting the valuable information available from their figures.
Imagine being able to receive fast, timely guidance on what you have just done enabling you to quickly decide what you need to do next. Not having to wait until after the year-end but each and every month receiving practical advice right away. Advice to enable you to make effective decisions and exploit your true business potential.
And what about dealing with problems faster too?
If you have to wait until the end of your accounting period to be advised of a problem, perhaps because it has suddenly become highly visible, it could be too late. It has probably become an “elephant task”. A problem so large that it can either be extremely expensive and difficult to rectify or it may even be terminal. If it can be rectified at this late stage it will not be fast, it will not be easy and it certainly will not be cheap.
If however you catch a problem when it is small, it is fast to rectify, it is easy to solve and it is inexpensive to put right. A simple change of direction. An easy change in your procedures. A small correction in the way you do business.
Most problems start small and then grow unnoticed over a period of time so it is essential that if you already prepare monthly management accounts that you use them effectively.
Certainly you need to speed up the preparation of these accounts so that you get your information as soon after the month end as possible. Receiving figures towards the end of the following month has meant that if a problem has occurred yet another month has gone by before you can begin to rectify it.
Many business owners believe that they have to wait for every outstanding invoice before they can “close down” the month otherwise the figures will be incorrect. However this is in fact less important than speed when it comes to monthly accounts whereas annual accounts need accuracy with speed being of a secondary consideration.
I am sorry to have written so much about problems because exactly the same applies to opportunities.
Most business owners are working so hard in their businesses that they do not have time to stand back and look at where they are going. Time is a luxury and few of us ever find the time to work ON our business rather than just working IN it. Surely then the chance of identifying opportunities or positive trends earlier must be priceless? Why not create an early warning system, to direct you towards positive trends so that luck becomes yours to control. Someone once said that luck is opportunity meeting preparation. But if you fail to spot the opportunity soon enough then all the preparation in the world will have been in vain.
So if you can nip any problems in the bud and spot opportunities as soon as they appear, how much more successful would your business become?
So what do you need to do?
Use your accountant to monitor your monthly figures, to look for problems and opportunities so that you can concentrate on what you do best.
Ask him to provide you with easy to understand graphs and key performance indicators so that you can easily and quickly understand what is going on, which can save you huge amounts of your most valuable asset – your time.
Receive information in a non-accountancy way, using simple language and pictures rather than reams of hard to understand figures.
Demand advice and recommendations rather than options and warnings.
Financial vigilance is one of the hallmarks of a successful company and many business owners learnt this hard lesson during the last recession.
If your existing accountant does not provide this service then we at Wood & Disney can help you. Designed to make more of your monthly management accounts, we provide jargon free analysis and explanation, with the added ability to project forward to enable you to assess the impact of potential decisions.
Ask us if you have any other key frustrations such as:
* Profits are too low
* Competition is making life harder
* You have to work too hard
* You are not enjoying life as much these days
* Too much within your business relies upon you
* There are too many problems
* Cash flow is tight and customers are slow to pay
It is likely that we can help you.
Call us on 01206 233170 or email us on info @wood-disney.com