There are times in a business journey where sticking your head in the sand and not paying enough attention to your numbers can start to cause some major headaches.
It's easy to feel overwhelmed as you consider adding yet another lot of jobs to your already extensive to do list, let alone being faced with the notion of having to understand what can sometimes seem like another language.
However, having more skin in the game in the day-to-day management of your accounts does not have to be time-consuming or complicated. In fact, the simpler you make this process for yourself, the better results you will get.
Below are some easy suggestions that will help you ease into getting a handle of your business accounts.
1. Set yourself one attainable goal at a time
One of the biggest factors that we see causing overwhelm in our clients is when they set themselves unrealistic financial goals. While it's admirable to set yourself a high-flying goal, if you can't achieve it, you will simply end up demotivating yourself. We urge you to set yourself a challenge that will take you outside of your comfort zone, just make sure the timeframe or financial figure you are aspiring to is something you can achieve.
2. Monitor one or two key numbers
There is no need to dowse yourself in excessive numbers or reports that don't mean anything to you. Based on the attainable goal you have set yourself, determine what one or two key figures you will need to monitor closely in order to help you achieve that goal and then just monitor that figure every month. Good examples of numbers to watch are your break-even point, your monthly revenue or profit margin or even your monthly expenses.
3. Set daily habits
Setting daily habits can help us achieve a big goal little by little. For example, if you were to aim to spend just 5 minutes a day reconciling your accounts, you would not be faced with a pile of boring reconciliations to action at the end of each month or quarter.
4. Automate where possible
Cloud accounting software is amazing – it saves bucket loads of time and it makes your key financial figures super easy to access and understand. We suggest you get onto it right now.
5. Measure your progress
Keep track of how you are progressing to achieve your goal. We find that when our clients set themselves mini milestones to achieve along the way, it significantly increases their chance of achieving their goal. For example, if your entire goal is to increase your revenue by 10% within 6 months, reverse engineer that goal and work out what your revenue needs to be each week or month within that 6 month period for you to be able to achieve that increase. By achieving your smaller goals, you will easily achieve your ultimate goal.
6. Make adjustments when necessary
If you are measuring your progress regularly you will also have the opportunity to make adjustments along the way if it looks like you are veering off track. Be prepared to spend the time not only monitoring your progress but also to make any necessary adjustments to help steer you back on track.
We love providing our clients with strategic and considered advice that helps them grow their business. If you would like to speak with one of our accountants about how we can grow your business, contact us today.