Sometimes, you’re struggling with handling your finances, or keeping your books up-to-date are being time and energy consuming. It can feel like wheels spinning in the mud—and it’s hard to get that traction back.
But how can you fix these kinds of issues and have a more efficient business?
Here are 7 things you must take on in order to improve your business efficiency:
1. Cashflow Management
Cash is King, I know you’ve heard this before. Any business owner knows that having cash on hand is vital when running an enterprise. In fact, you don’t even have to be a business owner to be aware of this—running a household is probably enough to convince you!
When cash ﬂows it is working for you, when It stops it is working for someone else.
Try these simple ﬁrst steps:
- Collect your debtors: How much money do your customers owe you. If they owe you then you are ﬁnancing their business. Collect your debtors.
- Use Time Payments: If a large bill oﬀers monthly payment for no (or very little) extra then use it.
- Use a BAS Agent: BAS Agents generally get more time to lodge with the ATO. You may get 2 or 4 more weeks to pay your BAS bill.
- Buy Stock in Bulk: Bulk discounts are ﬁne but you must be certain you can quickly turn that into cash or else it may end up as dead stock on your balance sheet.
- Use Suppliers’ Terms: if you are a big customer for them you may be able to negotiate a discount or extended terms for payment.
2. You’re Not Everything to Everybody
You’ve heard the expression “stick to your knitting”, this is not just a throwaway line, it is important to know why you’re in business and what service or goods you provide. Opportunities may appear attractive but if they’re not your core business they will distract you from where your proﬁt really lies.
- Be a Specialist in your ﬁeld.
- Know Your Products: Know which provide you with the best proﬁt, focus on these lines and discontinue unproﬁtable goods or services.
- Don’t be a Jack of all Trades and master of none. Customers recognise expertise and will sometimes pay more for the perceived beneﬁt of having a specialist.
3. Do What You Know
You went into business for many reasons but the main one is likely that you thought you could do your trade or profession better than others in the industry, this is what you need to focus on in your business.
Have a Superpower: Within your business you have a superpower, this is what you really know about. Your superpower maybe dress design, engineering, dentistry or architecture.
- Use Your Superpower in your business, this is what your customers are paying for.
- Do what you do Best – Outsource the Rest: Do you do your own legals or web design? Do you do your own company income tax or plumbing? Do you really need to do your own bookkeeping?
- You Need Many Skills to run your business, however, the best value that you can give to your business is to focus on your superpower and get others to do the rest.
4. A Good Bookkeeper
A good bookkeeper can do much more for you than simple data entry and reconciliations. Consider us your outsourced accounts and payroll department, working with you for long term growth and success.
Many small business owners think they’re saving money by handling their bookkeeping themselves. Leaving your books to a professional will:
- Free up time so you can focus on serving your clients
- Save you money that you can reinvest back into the business
- Give you peace of mind that things are being done right.
- Be somebody to rely on, who really knows your business, to help you implement plans for growth
One unrecognised advantage of an outsourced bookkeeper is that you will have a trusted professional outside the business that you can talk to about the business. Your company may be running smoothly enough, but you know things could be better.
5. Driving Blind
Reports, budgets and plans; This is dry and sometimes boring stuﬀ. Imagine driving a car with the windows blacked out, you had no mirrors and the dashboard could not be seen. You would not know where you are going, you would not know where you have been or know how far you’ve been and what speed you are travelling. If reports, budgets and plans are not your superpower then having someone to help with this can be very valuable.
- Reports that are six months or more are old historical documents. Reports from last week or last month can give you valuable information on how your business is travelling now.
- Budgets are often seen as crystal ball gazing; however, they can give you an idea how you want your business to perform in the medium and near future. Budgets provide the markers along the highway of your business that answer the question “are we there yet?”
- Plans are the ‘Sat Nav’ for your business. Plans will take you from where you are to where you want to be. Using the driving analogy, plans will show you the route you want to take, the streets to use and the streets to avoid, where to stop to check your progress, and to conﬁrm that you are on the right track.
6. Xero Accounting
Xero is no longer a new start-up, it a comprehensive accounting service.
Having an outdated accounting system can cost you time and money.
Some of the key beneﬁts of using Xero are:
- Cloud based service that can be accessed anywhere there is internet service
- Import bills for easier processing
- Easy to produce and recurring invoices to customers.
- Integrates well with hundreds of business tools
- Has a very good payroll module
7. Taming (Dis)-Organisation
Being organised and systematic makes for reliable, consistent, and accurate outcomes. This applies to dealing with your customers as well as internal operations. Here some tips on how to tame dis-organisation:
- Develop an eﬀective ﬁling system; physical or digital? Doesn’t matter, but digital takes up less space and can be automated.
- Clear of your desk and put back only what you actually need now. Have the rest ﬁled nearby (or even in the bin).
- Have written policies and procedures for your repeatable jobs. This will keep the outcome consistent and accurate.
- Written policies and procedures are essential when bringing on new staﬀ and when procedures change.
Having the right technology and expertise in your business can save you time, save you money, save you from stress, increase your proﬁtability, enable better decision making, improve your eﬃciency, provide valuable insights, improve your productivity, and increase your business value.
If want to take your business to the next level, let me know today to arrange an obligation free discovery call. It could be the best decision you’d make for your business this year!
Dai is a Master of Business Administration graduate of the University of New England, Registered BAS Agent and member of the Institute of Certified Bookkeepers. For 16 years he owned, operated and managed businesses in the tourism and hospitality industry – particularly Accommodation, Event Management, and Food & Beverage Management. In recent years, Dai has worked in the Not for Profit sector, Real Estate, Motorsports, and Motor Trades industry and business services, in Finance, Administration, and Practice Management roles, before becoming a Professional Bookkeeper in 2009.