Why isn’t my profit increasing even though my bookkeeping is done?
What are the reasons your profit isn’t increasing? Why you are still not creating BIGGER Profits, Even though your bookkeeping is done?!
Do you know what your numbers are telling you and the three big reasons you might not be creating bigger profits in your company?
No?
Okay no problem – We are going to talk about that RIGHT NOW!
Before we get started feel free to save this post or send it to your staff or business friend so they can help you put this in action!
Secret Number 1: You’re not paying attention to your daily cash balance. You would be shocked to know how many CEO’s don’t look at their daily cash balances.
It’s a lot easier to spend the money when you don’t look at it. You may be more conservative in your spending or decide you won’t make the next investment until you have more cash on hand to do so.
By seeing your daily cash balance you are more likely to feel the pressure to either get production ramped up!
What does that look like for your ideal client?: Does that mean sell more cars? Sell more packages? Sell more online products? Incentivize their team? Write the answer here:
Ask one of your team members to send you the daily cash balance – This should include the cash on hand + any customer payments that are in receipt that day!
This leads me to:
Secret number 2: Having your finger on the pulse of New sales and sales metrics Each week.
Knowing what your team is producing on a weekly basis in new sales gives you the ability to hold your team to a standard.
This also helps you to track weekly sales trends. Say the first few weeks of January are historically slow for you it’s not a great idea to spend all your cash in December in an effort to “lower your tax liability”
Because by January you will be taking out a capital loan to make payroll.
Have your bookkeeper, accountant, or even a team member generate a weekly Sales Metrics or KPIs (Key Performance Indicator) Report for you on a weekly basis.
Pick a day that works for you both and hold your team accountable to getting it weekly.
It’s not enough to have them generate the report if you don’t take the time to really analyze it and HEAR what it’s saying about your sales, how it’s helping you reach your goals or whether you need to fix something fast in your company.
Finally:
Secret number 3: Is looking at the cost of labor more frequently. Is your team just running the payroll and paying subcontractors blindly?
Companies like Starbucks, McDonalds, and really any large retailer or chain restaurant will look at their sales per labor cost ratio on the HOUR!
Now we don’t expect you to do that – but taking a look at your labor compared to the Brand new Sales KPI report you can really see what’s going on in your business.
Are the salaries and subcontractors working hard to ensure you are making more money?
Or are they hardly working?
Knowing exactly who is getting paid and having an expectation of what type of sales should be able to be generated because of that employee/contractor is crucial to the cash flow of your business.
It’s also possible that you are charging too little, or bidding too low on projects that your team is fulfilling.
Summary
So overall It’s great if the numbers are all being categorized in your bookkeeping software…
But if we don’t use the numbers to make decisions about your company’s financial health… Bookkeeping really isn’t going to do much for you.
Ask your team to get these reports for you and hold them accountable to doing so.
Also – Hold yourself accountable to taking time to READ the story your numbers are telling you.
Finally, never take your finger off the pulse of your cash flow.
If you currently don’t have a team to support you in this please feel free to reach out to us so we can see how we might be able to help.
Comment “MORE PROFIT” if you think we can help you create more profit in your company by implementing these strategies!
Contact us – we’re here to help!
Schedule a free, no-obligation Discovery Call with us: https://hello.burnsidebookkeeping.com/public/appointment-scheduler/630cfb590890c351b5d20c25/schedule
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