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Bookkeeping to Improve Profit | Supporting Strategies

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Bookkeeping Beyond the Numbers

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Bookkeeping provides more than financial data: It can unlock the key to meeting your business goals. Learn how you can clear the path to business success.

Bookkeeping is more than a scoreboard: It not only tells you whether you're winning or losing, but provides clues as to why you got ahead or fell behind. If a business owner is trailing on the bookkeeping scoreboard, I ask questions to find the root cause of the problem. Here are two real-life bookkeeping stories.

For Example …
Sometimes the cause can be deceptively simple. Once, I worked as a consultant for a small business run by a husband and wife. The company's profit margin had dwindled to almost nothing in recent years, and the couple's stress level was through the roof.

The wife was doing the books. The husband was convinced she was doing something wrong, because the company was still doing a steady business — and yet its profits showed a steady decline.

As it happened, the wife did need some help with the bookkeeping. This company was still keeping piles of receipts in shopping bags, so the books often contained errors that could take weeks to track down. There was a huge lag in reporting time that made it difficult to connect cause and effect.

But that's not why the company was struggling. Turned out the problem was the husband. In the past several years, the cost of materials for the business had increased 20%, but he had failed to account for that in his job costing. By making a simple adjustment and passing on the increased cost of materials to the customers, the business restored its profit margin. And the couple saved their marriage.

A Cost-Effective Solution
A contact in my business network referred a client who was thinking of expanding their business. He thought they might need help getting their books in order first.

I determined that while the company did need help with their books, that wasn't the area where they needed the most assistance. And it was an offhand comment from an employee that revealed their biggest problem. She casually mentioned that the company's landline service was unreliable.

I reached out to another contact in my vendor network, an IT specialist, and asked him to check it out. The company was in a rural area, and it turned out that their system had been installed incorrectly many years earlier. The cables weren't encased, and rodents had been chewing through them.

The business owner's first instinct was to hire a full-time IT professional to replace all those old cables with a modern, server-based system suitable for a company on the verge of expansion. I suggested that he outsource the IT instead. Moreover, I suggested that instead of installing an onsite server, he should move everything to the cloud. That second step saved him $20,000 right off the top, plus the cost of a full-time employee.

Meet Your Business Goals
As a small-business owner, you can use the expertise of a bookkeeping and controller services company to not only do your books, but to help you meet your goals, by providing guidance and a network of trusted professionals — CPAs, attorneys, IT wizards — available to help overcome whatever obstacle is keeping your business from achieving its full potential.

Learn More About Gaining Financial Insight With Bookkeeping and Controller Services

At Supporting Strategies, our experienced, U.S.-based professionals use secure, best-of-breed technology and a proven process to provide a full suite of bookkeeping and controller services. Are you ready to learn how you can move your business forward? Contact Supporting Strategies today.

Ben White

Author:

Ben White

Ben White, Managing Director of Supporting Strategies | Lehigh Valley, provides bookkeeping and controller services that help business leaders achieve their goals.

Legal and Tax Disclaimer

This website is created by Supporting Strategies to provide general bookkeeping and accounting information only. Supporting Strategies does not provide tax, legal or accounting advice, and the information contained herein is not intended to do so. As such, the information provided should not be used as a substitute for consultation with professional tax, legal, and accounting advisors, and you should consult with a tax, legal and accounting professional before engaging in any transaction.