According to National Business Capital 60% of business owners aren’t confident in their accounting. It is true that most business owners did not sign up for an accountant job when they created their business. When it is not your field of expertise, it is not easy to feel confident about your company’s finances or even know what to ask for. Most entrepreneurs just know that they are not getting help from their financial reports to run their business.
Entrepreneurs need to know, at any time, where they are compared to their budget or last year, and what their biggest financial problems are. Forget about the financial jargon. Here are some actionable insights on what matters most per industry.
- Contractors are out and about all day – on the field directing their crew, at suppliers picking up materials they need or walking new jobs – and crunching numbers for bids after hours. They don’t have much time left for their business finances.
- Costing of projects is core to a contractor’s job. How much materials were spent on a project? How much labor hours were used thus far on the project? What work in progress is billable right now?
- When starting a project, a contractor most likely needs to pay upfront for the materials and advance a few payrolls until getting paid by their customers.
As a contractor, here is what you need:
- Mobile access to your books to check your cash balance on the spot, send an order to your vendors and create estimate or invoice your customer on the field.
- Reports that determine the work in progress by showing unbilled labor hours.
- Automatic billing from estimates of unbilled activities.
- Service professionals spreads their time and resources across multiple projects. Keeping track of time and expenses per project is extremely tedious and time consuming.
- The variety of customers makes it difficult to prepare many different invoices and to know which ones are the most profitable.
- Most projects are paid upon completion which can make it overwhelming to stay on top of cash flow.
The ideal accounting system for a business professional
- Bills by appointment. It tracks your time in your calendar and automatically generates an invoice according to each clients’ billable rate.
- Manages your cash flow by tracking and reporting on the hours and expenses incurred per project
- Calculates profitability per customers
- Inventory is everything for wholesale businesses. They rely on knowing their inventory at all times to satisfy their customers.
- They operate across various sales channels – brick and mortar warehouse, e-commerce platforms, and multiple sales representatives. They have to duplicate all orders into their accounting to record their sales per channel and rep.
- Wholesalers work hard to build up their purchasing power to get the right product, at the right time and the right price.
Ask your bookkeeper to:
- Setup inventory management to maintain an accurate inventory in real time
- Setup an import of sales orders/invoices from your multiple platforms to automatically records all your sales per channel and sales agent.
- Setup your preferred vendors, items table in your purchase forms and sales reports per products.
How confident are you with your accounting?
With a better understanding on what useful accounting looks like, the next step is to reflect on what you are getting today. On a scale of 1 to 10, are you getting what you need from your accounting? How many of the elements above are you already implementing?
For over 20 years, we have setup accounting systems that are useful to business owners. If you are missing most or a few of them, don’t feel embarrassed, it is very common. By working with our clients to identify their pain points, we can solve them. Use this code BOOKS2020 for a free consultation.