As a business leader, you're laser-focused on doing everything you can to improve your company. You explore every possible lead. You network with influencers. You read everything from bestselling business books to the most obscure industry-related websites.
But there's one area of your business that you might not realize is worthy of a deeper dive. And yet, it's an area that can yield some of the quickest and most tangible improvements: bookkeeping. Here's a brief guide to how you can gain financial insight from your bookkeeping services provider — insight that can drive your most important decisions.
By Determining If (and When) You're Ready to Grow
Most anyone running a business has considered expanding at some point, whether by hiring another employee or two, moving to a bigger office or opening a second location. As a business leader, you want to think through each potential move. Will a new employee help generate enough revenue to cover their salary? Will moving to a new office create too big a disruption? Would a second location spread time and resources too thin?
Those are all good questions. And you might not realize this, but you can work on the answers by asking for input from your bookkeeping services provider. It starts with building a realistic budget. After all, you can't determine whether you can afford a new employee or a new office until you know how much available cash you have after accounting for expenses.
A knowledgeable bookkeeper can not only help you determine where you stand today, but also help you forecast where you'll be tomorrow. If an analysis of the past five years' books shows that your profitability has increased roughly 10% each year, for example, that's a good indication that you can plan for managed growth. On the other hand, if you've swung wildly between black ink and red ink, you need to dig deeper to find out what's going on before committing to any major capital expenditures.
You can use a high-level bookkeeping services provider to help you map a course much farther into the future than you thought possible.
By Determining Where Your Business Stands
Many types of businesses need real-time financial insight — from builders with a lot of checks to write and decisions to make on-site to rapid-growth companies with geographically disparate management teams.
In cases like these, you can ask your bookkeeping services provider for a solution. A professional bookkeeping service that uses the latest in industry-specific software and cloud applications can provide real-time financial information to let you know exactly where your company stands on a given day.
By Compiling Thorough, Reliable Financial Data to Present to Others
It's not just the company's business leaders who need a clear picture of the organization's finances. Often, the company is required to provide transparent financial information to outside institutions, whether it's a business seeking a loan or pitching to investors, a franchisee filing monthly reports or a nonprofit reporting to its board of directors.
Under these circumstances, it's not the business leaders who need insight into the company's financials — it's other entities. But that's just as important. If advisors, investors and others don't have complete and up-to-date financial information, they won't be able to provide you with the guidance you need.
By Finding Ways to Become More Profitable
Isn't that what business is all about? As the business leader, your role is to think strategically and explore new opportunities. The big-picture stuff. To do this, you can use professional bookkeeping support to comb through the details of your company's finances, such as profit margin reports or over- and underperformers in sales, to give you every insight, and every advantage, to achieve those bigger goals.