10 Tips for Business Profitability
There are so many things to think of when running your own business that it is easy to lose sight of the fundamental things that impact on your business profitability.
The following tips should help you do a quick check of where your business stands. If you need to improve the way in which you manage these areas and be aware of your Key Performance Indicators (KPI's) contact your local Jim's Bookkeeper on 131 546.
Tip No. 1: Collect your debts
If you need to offer credit to your customers make sure that you ask for any outstanding amounts to be paid by a certain date and follow up with regular demands for payment backed by a debt collection strategy. More about Collect your debts
Tip No 2: Watch your cashflow
A cashflow budget will highlight periods of negative cashflow.
Tip No. 3: Reconcile your Bank Accounts
By doing a reconciliation you are checking your own internal records against those of the external records of the bank.
Tip No. 4: Be aware of your GST liability
Proper records need to be kept of GST collected and GST credits that are claimed as part of the BAS reporting process.
Be aware of your GST liability
Tip No. 5: Control your Drawings
Businesses need working capital to maintain cash reserves to cover the cost of operations.
Tip No. 6: Get a Point of Reference for Expenses
The purpose of collecting financial information is to measure it against something.
Get a Point of Reference for Expenses
Tip No. 7: Know your Breakeven Point
Every business has to spend money in order to make money.
Tip No. 8: Manage your Inventory Levels
The time it takes to convert an item purchased to a sale can have a significant impact on a businesses productivity and cashflow.
Tip No. 9: Keep Accurate and Timely Payroll Records
If you employ staff then there are a number of obligations on the employer to withhold and pay income tax, work cover, superannuation, various types of leave and allowances.
Keep Accurate and Timely Payroll Records
Tip No. 10: Make Technology Work for Your Business
Computers allow you to enter information once and then use this information in many different ways.
Make Technology Work for Your Business
