How to understand your business figures can seem like a daunting task! In this blog, we hopefully give you a bit more of an insight into understanding your business figures.
Your business is unique, therefore your business figures will be too. How to understand your business figures and which are most relevant to you will be key to your success. This is where we come in! We can help you track the numbers that matter most in your business to help you succeed and grow.
We’ll take the time to explain all the jargon so you know how your business is performing. Understanding your business figures will help you stick to your business goals. Your figures can show you if you need to cut costs or if you need to re-group. Running your business more efficiently can help reduce your working hours and give you the confidence that your team can run your business without you.
Checking your figures annually and monthly can help keep you on the right path. If you use accounting software (and you should!) you can create many different reports which can show how your business is doing. You can have a look at historical figures which can point out any trends or anomalies you may have. This can have a massive impact on how you set your future goals. It can also show you when things are good and when things are bad so you can plan ahead.
There are other driving forces that can give you insight into your business figures. Factors like identifying your best service/product and average customer spend, for example. Other factors include variable costs (those that change with your outputs) and fixed costs (your overheads). All of these metrics can help you understand how and why your customers buy from you. They can show you opportunities to increase sales and which products/services are performing well or not so well.
Something to remember is that profit can’t be managed, it’s the end result. It’s the other key measurements that can help you to increase profits and the efficiency of your business.
Be clear on your goals
Having clear business goals will help you create milestones to keep you on track. If you’ve set up a new business or have an existing business it’s always a great idea to have a business plan. Having a business plan will help you to outline your business goals, how they will be obtained and in what time frame. Check out our blog on How to write a business plan if you need help with your plan.
It’s always good to have a clear idea of what you want your business to look like in the future. It’s not always easy to follow a business plan as life can throw curve balls at you! However, having a plan of action can help keep control of your business when life happens.
As explained earlier, accounting software is a very valuable tool to have in your business. It can show you how to understand your business figures in a simple, yet informative way. If set up correctly, it can give you lots of information which will help to plan your business goals. Once you’ve set up all the processes on the software you can then begin to interpret the data and implement your findings into your business.
Accounting software can also save you time by automating processes. This is something that may take time in the beginning but will definitely save you time in the future.
We recommend using Quickbooks Online. It’s easy to set up, you can link your bank accounts to the software and there are many reports to choose from to monitor your business figures. Quickbooks have a great Youtube channel to show you all you need to know about using the software. They also have webinars, guides and help sheets and if you get really stuck you can always give us a call.
If you need to reduce costs and maximise profits within your business you definitely need to keep a close eye on the figures. Monitoring your business figures can help you identify non-profitable areas of your business. On the flip side, it can also help you to specialise in a specific area of your business.
Understanding your business figures can help you to reclaim your valuable time and even change or reduce your working hours. So, learning how to understand your business figures can give you more time to spend with the family!
If you would like help on how to understand your business figures, to get your business onto accounting software or both! Give us a call/email today.