Well-run businesses have excellent systems that produce key information about the business' status. Regular monitoring is important to ensure the business owner or chief executive always has a finger on the pulse of business activity and can be quick to make changes where necessary.
Small businesses are fortunate in being able to respond quickly to fluctuations in the market place. In fact, to be successful, it is imperative they do move without delay to improve a bad situation. It is vital therefore to monitor the following information:
- Daily bank balances
- Daily sales information giving, total sales, sales of individual products and sales made to new customers
- Daily, weekly or monthly gross profit figure achieved (normally only available via a computer system)
- Weekly debtors' aged analysis, showing the amount owing to the firm and the age of those debts
- Labour productivity reports daily or weekly showing the actual time charged to clients or work on productive tasks – how does this compare to budget?
- A weekly statement of financial performance report
- Weekly creditors' aged analysis, showing the amount the business owes and the age of that debt
- Detailed monthly financial statements on all aspects of the business operations including statement of financial performance and statement of financial position, with comparisons to budget and cash flow forecasts
- Annual budgets and annual cash flow forecasts (updated monthly)
- Details of any lost customers showing details of what their annual sales had been and reason (if known) for them leaving the business
- Specific details on sales over a specified amount – who the sale was made to and what was it for.
At Paul Martin Chartered Accountant we can assist you monitor your key business metrics. Contact us today for help with you business systems.