Smarter Primate

I have never met a business manager who does not spend a substantial period of time every day dealing with business problems. Serious business problems generally occur unexpectedly and to the unprepared. Finding problems you have to solve in a business is a real challenge. It’s absolutely essential that every manager is skilled in the art of problem solving.

Good financial controls are critical to the successful management of any business. A good set of financial controls will sound the alarm and get the managers attention when financial problems begin to happen in the business. Financial controls go hand in hand with the reports produced by small business accounting software. For example actual costs versus budgeted costs, differences in the performance in current and previous periods of revenue and expenses, behaviour of cash flows and profits are all things you have to be able to comprehensively report and therefore should be easy to generate from small business accounting software packages. I believe the best approach is “get a rope across the river” by starting out with a handful of key numbers and relationships, designing the reports to highlight these, refining the out put and then building out from here.

Always monitor the margins on the items that you sell and as soon as you detect any changes in their values you should take steps to understand why this is happening and bring it under control. Watch your margins and changes in the number of sales, especially if you are running a business which relies upon volume sales for income as losses multiply at a frightening rate if the causes are not immediately arrested. It is good practise to focus on the behaviour of fixed costs against your business plan especially at the beginning of a financial year. Monitor the collection of payments and pay special attention to the average number days it takes for you to receive the money, this is easily done using the debtors reports to be found in most small business accounting software.

Experience is the way to learn and over time you will learn which financial controls should be highlighted in your accounting reports, just make sure you have the right small business accounting software that can generate these.