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Turn Your Financials into a Powerful Management Tool

Thursday, May 29, 2014

How many of you have seen the ”Dave” Staples commercial? It shows “Dave” serving in all the positions of his company, asking “Dave” when “Dave” needs help. 

As business owners we serve in so many capacities, it is difficult, if not impossible to do everything well. When we get pressured, we get stressed. Negative stress (yes, there is positive stress) can cause exhaustion and illness often follows. Most of us have experienced that sinking feeling when we realize we are “in over our heads.”

When it comes to our financials we try really hard to get everything not only in the system, but in the right bucket. Time is often our enemy. Invoicing gets behind which can cause a cash flow crisis. The ‘taxman cometh’ and we might not be ready.

Whether we do our own books or have them done, we are ultimately responsible for the result. Although responsibly managing the ‘books’ was probably not the reason we started our business, it will be one of the primary reasons we succeed in business.

It all starts with organization. Chaos has no place in a financial system. It starts with a Chart of Accounts that actually matches the business and more importantly you, the owner. The second step is imputing good information and most importantly getting the data in the right place. Once these steps have been taken, you can then produce various reports on a regular basis. Those up-to-date reports can provide the information needed to find the answers to the following questions and more:
  • Are my products/services priced to make a profit?
  • What is labor actually costing me?
  • What are my true production costs?
  • Are my overhead costs under control?
With this financial information, you are now empowered to make key strategic business decisions based on fact not hope. Having access to these answers put you in the driver’s seat of your business. That control alone can bring down your stress level. Take action today to get control. If you need outside help, get it. Make sure if you get help with your financials, you stay involved in the process. Learn what you need to know about financial management, so even if you choose not to do it yourself, you can inspect what you expect and know it is being done correctly.
 
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