Will next financial year be the one where your small business becomes a lot bigger? Will you see all your planning and hard work paying off, and your business taking off like the proverbial rocket?
They may seem like questions you’d ask a fortune teller at your local Sunday markets. But you don’t need to look at patterns in tea leaves to get the answers.
You just need to look at your books.
Your business’ bookkeeping records can give you both the information and the tools to not just achieve growth but anticipate it.
Here are four bookkeeping tips that will help you grow your small business.
- Get your books up to date (and keep them there). Okay, so regularly updating your records and reconciling your accounts may not be much fun. But to have any chance of growing your business you need accurate, up-to-date information. And if that isn’t incentive enough, these regular updates will also uncover any mistakes in your asset accounts.
- Take your books to a specialist. Getting your books professionally reviewed by a bookkeeper and accountant can provide you with information you can’t get anywhere else. It's a financial health check for your business where you can make sure:
- everything is going according to plan
- there won’t be any financial hiccups in the foreseeable future.
- Work out your Key Performance Indicators (KPIs). Identifying the business KPIs you’ll need to keep track of through financial statements is a great way to predict how profitable your business should be.
And this is where taking your books to a specialist really pays off. For example, at MBC we can provide custom reports that highlight those KPIs that matter most for your small business. Just remember that as your business changes your KPIs (and our reports) will need to change so you can keep measuring your business’ success.
- Have a financial forecast for your business. You may think predicting your business’ financial future is as simple as looking at its past performance and then projecting it into the future. Unfortunately, this method doesn’t cater for other costs associated with doing business you’ve never had to worry about before.
A financial forecast will take these new costs into consideration, and help you predict your business’ financial needs both now and in the immediate future. And that information will help you prepare for any problems that come up, which will save you both time and money.
Once you’ve taken these steps and worked out how your business is doing, you need to pass that information on to your managers and other key personnel. You need to get everyone up to speed not just on how the business is doing now, but also the systems you have in place to grow your business in the future. That way your managers can make the right decisions using current financial information, rather than making decisions that are either too late or flat out wrong.
By following these bookkeeping tips, and talking to specialists such as MBC, you may discover your small business is about to get a lot bigger.
And you won’t have to drink any cups of tea to find out.