Essential financial controls for every business
small business accounting software
The number of hours per day spent solving problems has the biggest impact on the time of good business managers. Serious business problems generally occur unexpectedly and to the unprepared. Finding problems you have to solve in a business is a real challenge. I cannot see how any manager can be worthy of this title if they are not a good problem solver.
It is vital that all business managers give adequate attention to the implementation of robust financial controls. Good financial controls can be likened to alarm systems that alert managers to financial problems. Without the reports to be found in most good small business accounting software packages you cannot hope to implement financial controls. You have to be able to do side by side comparisons of period versus period or budget versus period and for this you need to make sure that your small business accounting software can generate the right reports. The best way to start is to identify a core group of the operating ratios you want to track and monitor and then craft the reports you need to highlight these key numbers in a coherent and easy to read format.
Margin changes can spell trouble, so you should be vigilantly tracking these and have a mechanism to alert you when changes occur. 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. Don’t ever let fixed costs deviate from the plan especially in the first quarter of the year. Scrutinise the debtors reports found in most small business accounting software specifically for the average number of days it takes for you to get your invoices paid, this is a really essential operating ratio that every business should have in place.
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.
