Here are my top 5 tips to manage profit and cash in a business
- Get your monthly reporting in order
- Understand your cash
- Create a profit and loss budget
- Set daily and weekly numbers – KPI’s
- Analyse the numbers
Get your monthly reporting in order
Each month you need to have a P&L and Balance Sheet (BS) produced and sent to you. It is not your accountant’s responsibility to monitor these numbers. It’s your business you must know the score. Set a deadline for these reports. For my clients, it tends to be the 15th day of the month. You want to close off the previous month by the deadline and have the reports emailed over to you. Having a deadline is really important because- It forces your bookkeeper to keep everything up to date and
- It stops the P&L and BS numbers from changing (i.e. you look at the profit one week and you’re rolling in it, the next week that same months P&L has taken a serious battering)