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5 Steps to Take Financial Control of Business

Financial control

Sometimes it’s the basic things in business that can lead to financial control which can lead to success. Ticking off the basics can mean you have more time to focus on the tasks that lead to more sales – marketing, new clients, customer service and of course your niche.

The financial side of business can often be overwhelming for a lot of business owners and as result is neglected or simply misunderstood. We believe the answer to this is information. Information brings confidence and power to business owners. Information allows business owners to make the best possible decisions for their business. Important components of this include putting a recording system in place, regularly reviewing reports and calculating your break-even point.

Step 1: Bookkeeping System

First thing, make sure you have a great bookkeeping system in place. Xero & MYOB are the top choices for small-medium business. There are also many others out there – Quickbooks, Saasu, Reckon, Wave, Rounded, Invoice2Go. Whatever you choose, I recommend you check that your accountant is confident with using it, it offers you the functionality you need (payment system, bank feeds etc) and you don’t let the price (or the lack of) of the software blind you to its short-comings – free is not always better.

Remember to choose a system with the assistance of a great bookkeeper that can let you know what will be the best for your business and reporting needs.

Step 2: Engage an Experienced Qualified Bookkeeper 

Next on your list, should be scheduling when and who will be reconciling the bank transactions, recording bills and sending invoices. Document this process, even if it is yourself at this stage filling all the roles. As your business grows, you should be delegating the day-to-day processes to free up your time to focus on the business. BAS preparation should always be done by a qualified BAS or Tax Agent – don’t risk an audit by being stubborn.

Step 3: Review your Reports Regularly 

In the last few weeks we have covered the importance of reporting. Once your accounting system and bookkeeping processes are in place, this should be your next focus. Regularly reviewing your profit & loss, balance sheet and cashflow statement will let you understand where your business is at, right down to what sales were made this week, to whether the business is self-sustaining and no longer requiring capital injections from owners.

Step 4: Know your Break-Even Point

Knowing your break-even point is the simplest metric each business owner should know. Refer to our blog to understand what it is and how to easily calculate it for your business.

Step 5: Choose your KPIs

Once a business has the initial steps under control, we help them choose 3 key metrics or key performance indicators (KPIs) that may predict how the business is performing now and in the future.

  • # of coffees sold per day, average $ transaction, debtor days, # leads/enquiries, conversion rate and gross profit.
  • Choose just a few and make sure they are suited to your industry.
  • Track them on a regular basis, before and after any new initiatives or marketing campaigns.
  • Use your reporting system – Xero, MYOB etc, any POS software or inventory software to automate the tracking.

Together your reports (profit & loss, balance sheet & cashflow statement), break-even point and KPIs should provide an excellent start to knowing more about your business. Remember the well-known adage ‘knowledge is power’ & use the information from your business to your advantage.

Interested in knowing more about your business – we offer a free 30-min review of your business bookkeeping, reporting and performance indicators. Contact us on 07 3849 3816 to arrange a time.

Disclaimer: The information contained on this website is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. Taxation, legal and other matters referred to on this website are of a general nature only and are based on Goad Accountant’s interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.

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Karen Goad
Karen Goad
Owner & Founder of Goad Accountants and Simply Business Bookkeeping. Karen is a Chartered Accountant and Certified Tax Adviser with over 19 years of experience advising property investors, property developers, veterinarians, small and medium business and helping them get the most out of their business through accurate record keeping, tax advice, KPI monitoring and profit improvement strategies. Goad Accountants also specialises in self-managed super fund administration.

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