There is more to an idea than just an idea. OK, you may have an idea to increase sales and raise revenue – but what you really need are some ideas that will make your idea make money.
Accounting is one of the essential elements of any business and when your sales grow you need to know everyone on your team has one focus in mind, and that’s profitability.
By implementing a few simple ideas you can really help your business financially. Cashflow, wealth protection and growth solutions are all crucial in growing a successful business.
Now is the time to focus on your business and identify solutions and strategies to:
- Improve profitability;
- Minimise tax; and
- Create and preserve wealth.
- Profitability of sales
Your accountant’s job doesn’t just come into play at the beginning and end of a sale. If you want to get your profitability up you need to involve your accountant in a more active role within the sales process. So how can the finance department help keep the sales force on track with your profitability objectives?
- Communication: When your sales team understands the financial requirements of your company they are much more likely to strike a better deal and negotiate better payment terms during the sales cycle. By communicating cash flow fundamentals such as financial systems and processes that sales activities must support to achieve profitability, you’ll be amazed at just how your sales team will strive to meet your profitability objectives.
- Education: You understand what it costs to produce your product and the resultant sale, but do your staff members? A thorough approach that educates all staff members in the costs of production and fulfilment processes and that encourages communication between sales and production departments will help ensure that every deal they strike is profitable. A thorough approach coordinates forecasting, training and reporting between sales and production departments.
- Retrospection: When instituting best practices for future sales efforts, review prior contracts for profitability by tracing each deal through the pipeline to understand where bottlenecks and late payments occurred. If some individuals or teams consistently achieve better results than others, have those groups explain the reasons for their success to other sales teams.
- Compensation: The big motivator for your sales force is linked to the personal income they can generate. Link salary, compensation packages and rewards directly to payments collected. You’ll be giving your sales team a greater incentive to collect payments on time and to make sure that when they are striking a deal, they do it realistically with a payment plan the client can manage.
- Consultation: Don’t try to do it all yourself. If you are time-poor then hire a bookkeeper or accountant to help you. You will free up more of your time to concentrate on raising revenue and profitability which will more than pay for consultation fees. Services a bookkeeper or accountant can take over include paying salaries, coordinating and handling accounts receivable and payable, balancing ledgers and bank accounts and organising financial information required for business plans, loan proposals, cash-flow statements etc.
- Protection: Increasing the profitability of your sales and in fact, your entire business can be as simple as protecting yourself against fraud. Ensure you’re not being ripped off by fake invoices requesting payment for things like advertising in bogus directories or publications.
Make sure that you or your staff:
— Do not approve any purchases over the phone;
— Know what you are buying by requesting information by mail, online or in person;
— Never pay an invoice unless you have proof of purchase.
- Accumulation: Now that you are making a profit you need to look at wealth creation. One of the best ways to create wealth is through leverage, which can offer great tax breaks for the accumulation of capital growth assets. By leveraging your existing cash balances or cash flow to hold as many capital-appreciating assets (such as your premises) as you are comfortable with, you will increase your wealth.
Strategic financial planning will keep your business ahead of the field. With legislation becoming more complex and constantly changing, you need an accountant who can provide your business with up-to-date information. Achieve Business Solutions is currently offering complimentary Smart Strategies Consultations for the months of May, June & July 2014 to all Frankston and Mornington Peninsula business owners.
The consultations are designed to help you improve and grow your business in ways you may not have thought of or even thought possible.
Wayne Lock, Director of Achieve Business Solutions, the accountants Frankston business owners trust, said that having an accountant who knows strategic financial planning inside-out is paramount because a greater number of responsibilities are being placed on small businesses. Developing a road map of where you are today to where a business wants to be tomorrow is tantamount to achieving business goals and consequently financial freedom.”
Wayne went on to say that he is really looking forward to seeing just what local businesses are capable of, and showing them how much they can achieve without a great deal of extra effort on their part. 'These Smart Strategies' Consultations are just that – smart.
We have set aside the months of May, June & July 2014 to conduct these consultations and are really looking forward to helping our current clients as well as any other businesses that might just want a bit of free – but very valuable advice. There are no obligations, no strings.”