Knowing exactly how your business is performing NOW is arguably one of the biggest keys to improving your business performance in the future.
With the development of cloud accounting, all the information is at your fingertips on a timely basis. You just need to use it!
Case study: Retail shop owner wants to better understand shop sales and usage of employees.
Business owners start to know this kind of information in their head ie how much the shop would generally take on any given day. However, it’s not much use to anyone up there!
Action: With a few changes to the data entry process, this information can easily be gathered, tracked and then reported on using the xero accounting system.
I have recently set up xero to track “daily shop sales” for my client. By also using the timesheet function, we can then start to report the use of employees v the revenue brought into the business on any given day.
Benefits: These changes will enable us to see –
- Which days generally bring in more revenue than others
- Which days typically require more labour
- Which (if any) employees are more productive than others
- How many sales (quantity) were made on a particular day
- What the average sale was on any given day (and any period of time)
Value: The business owner is now better equipped to determine rostering requirements and potentially save money on days where additional labour is not required, or perhaps schedule time for themselves on those quieter days to conduct any training and work ON growing the business.
Ultimately, by tracking the $ value of sales, # of customers in the store and the average value of each sale we can also now track the effectiveness of any sales strategies that are implemented.
Worthwhile exercise don’t you think?!
Take Home: What could you be tracking in your business to help you “join the dots” and move your business forward?
With over 15 years experience working with small and medium business owners I’ve had a lot of experience with reviewing new software programs, implementing new accounting systems as well as making sure business owners are using their accounting system in the best way possible for their advantage.
MYOB made a huge impact and has dominated in this area, boosted along by the introduction of the GST and the need to keep more updated records for regular BAS preparation. MYOB in my opinion, up until the last year or so, suited the needs of the majority of small businesses (even a lot of medium sized businesses) and was more often than not, my first choice.
Harnessing advancements in technology, Xero has entered the accounting software market and is (quickly) changing all that. I’ve been reading with interest the opinions of “those in the know” regarding Xero and cloud computing and the changes to bookkeeping and the accounting industry in general. To keep up with the latest in what’s happening, I recently attended the roadshows for both Xero accounting software and MYOB, which I found quite interesting (more below).
The contrast between the attendees at the Xero roadshow and those at the MYOB roadshow were clear and paint quite a picture. There was a lot more colour, a buzz about the place generally and you could go as far to say people were “excited” about the Xero product. On the other hand, the MYOB roadshow attendees generally were the image that springs to mind when you think “accountant”, enough said. Generally, most attendees would have walked away satisfied that MYOB is (very) busily working away at updating their product to be more “innovative” and to work more efficiently in the cloud environment.
To be honest, I have a foot in both the Xero and MYOB camps. However, I must say that some of the talk about Xero and the cloud in general, reminds me of the Chicken Little fairytale. Is the sky really going to fall in with these changes?… In my mind these changes are advancements that provide the ability to add increased value to my clients’ business.
The way I see it, the old 80/20 rule springs to my mind. SME’s can cost effectively gain access to improved accounting IT functionality and accountants can harness it to provide real value to clients. Let’s systemise and make totally efficient the routine 80% of the basic accounts/bookkeeping function that is essentially repetitive. Why waste time on that?
What we’re left with then is the 20% that requires greater attention and provides the biggest opportunities to improve the business’ performance. This leads to having reliable reports that: are updated in real-time; are remotely accessible 24/7; and are produced in the most cost-efficient manner. This leaves time and budgets available to be able to implement solutions that will truly make the business better and ultimately, a mindset change. Sounds good to me 🙂