Getting finance systems organised
Measuring and managing costs is essential to running a profitable and sustainable business. IT and software can help track and manage costs in all organisations.
Most businesses use finance software packages such as Xero, Sage and QuickBooks. These packages are relatively easy-to-use, and allow you to generate monthly management reports, calculate VAT, and produce year-end accounts quickly and accurately. A well organised finance system coupled with tactical spread sheets or a Management Information System (MIS dashboard) is essential. A monthly sales forecast, and monthly expenditure forecast will allow you to manage your business looking forwards, in-month, and behind time too (most account reports are in the past).
Accurately tracking costs
A good accountant will help configure your finance system and tracking tools. This will help you manage costs more effectively. It should also reduce the time your accountant needs to produce your end of year reports, and therefore should reduce their fees. Your accountant will charge you for their time. A few hours investment will be really beneficial, and allow you to deploy your time in other areas.
Use spreadsheets to produce graphs and pie-charts of your data. This will allow you to produce some really quick views of your data and trends in your business. The more accurate the interpretation of your data, the more accurate you can forecast. Communicate these reports to management and key staff, and allow these people to understand and enquire as to why or what the trends mean.
Project or product Profit and Loss reports
Code all invoices to a ‘nominal code’ and to a customer account too. Adding in staff costs per hour will give you an accurate report showing the project budget agreed, costs incurred so far, and the invoices paid to date. With one calculation you can easily work out the project profit and loss, and make meaningful decisions about the project.
Investing some time and money in your Finance systems and software will provide you and your team with powerful tools to keep you in financial control.