Each month, your accounting system yields actionable information for you to run your business better. Here are some key reports that all business owners should review every month.

Balance Sheet

A quick review of the balance sheet can tell you the balances of your current assets and current liabilities. Current assets should always be larger than current liabilities; if it’s not, you may have liquidity issues.

You can also take a look at these accounts: cash, accounts receivable, and accounts payable. They should look reasonable to you based on your business history.

Accounts Receivable Aging

Your aging report can alert you to who has not paid their invoice, so that you can take action to collect that money. Any balances over 30 days should trigger a collection process since the older the receivable gets, the less likely it is to collect.

Accounts Payable Aging

Hopefully, this report is clean and you are able to pay all of your bills on time. If you have an unusually large amount in this account, you’ll want to make sure you have the future cash to pay the bills.

Income Statement

The first number most entrepreneurs look at on the income statement is profit. It’s a good idea to review every account balance on this report to see if it is what you expected. Some questions to ask yourself include:

  1. Did I generate the amount of revenue that I expected? If not, should I ramp up marketing for the next few months?
  2. Do all of my expenses look reasonable? Are there any numbers that look too high?
  3. Are my payroll expenses in line with what I was expecting?
  4. Which accounts caused me to generate more or less profit?
  5. What I can I do next month to improve performance and increase profit?

Sales Reports

There are many excellent sales reports to dive deeper into your revenue so you can see what sold and what didn’t. Sales by Item and Sales by Customer are two good options for you to get more detail about your revenue balances. By analyzing your revenue, you can see what promotions worked and how you might take action to increase sales.

These five reports are very basic, but they are also very key to your business. To profit from these reports, it’s up to you to take action in your business to improve your success.

More and more small businesses are finding virtual meetings useful. Virtual meetings have many advantages:

  • No travel time is needed for participants, so you’ll save on gas and vehicle maintenance.
  • They create an ability to visually connect with remote employees, customers, vendors, partners, job candidates, and other stakeholders.
  • They are better than a phone call because of the visual element.

Before you climb into the car or book a flight, think about whether a virtual meeting could save you time and deliver the same result. It’s a very big change in habit to get used to, but when you do, you’ll find it saves you time and money.

To hold a virtual meeting, you’ll need a software app that works in your browser. There are many choices available, and one popular one is called Zoom. You can find them at https://zoom.us/.

It’s easier than you might think to hold a virtual meeting. The learning curve is more psychological than any skill or equipment needed. You’ll need a computer, and you can use your phone or your computer for audio. If you use your computer for audio, you’ll need a microphone and speakers.

For best results, you should also have a webcam built in to your computer, or you can purchase one separately and connect it. Everyone is camera-shy, or webcam-shy, but don’t let that stop you! You can always host a meeting without video.

Zoom has a free account that you can use to try out virtual meetings. Once you’ve set up your account, you can schedule a meeting or host a meeting on the fly. Setup choices include whether you’ll use computer or phone audio, whether you want the video to be on or off, and whether you want to record the session, which can be very handy. You can also mute and unmute participants, so that it can be used for classes as well as meetings.

Here are a few tips to make sure your virtual meetings go off without a hitch:

  1. Treat a virtual meeting with the same importance as a face-to-face one: be on time, have an agenda, and make sure everyone is heard.
  2. Audio quality is probably more important than visual quality. If you are new to the software, do a test run before you start inviting clients to meetings so you can get through any learning curve. Consider using a microphone headset for higher quality sound. Apple EarPods work great if you have an iPhone.
  3. For good video results, face a window or light source so that your face is not in shadow. The brighter the better; everyone looks better with more lighting because the light erases wrinkles! If possible, the webcam lens should be at eye level or above. You can use books under your computer to raise it if you need to.

Try virtual meetings in your business, and invite us to your next meeting. We would love to see you!

Setting expectations in your business is essential to gain the trust of your customers, avoid conflicts, and maintain a high level of customer service. One way to set expectations is to clearly state policies that are customer-facing. Many of these are accounting policies that we can help you with. The following policies are ones that every business should clearly publish.

Refund Policy

When customers purchase your products or service and don’t get what they expect, what is their recourse? Your refund policy should clearly state which products and services are refundable. Do customers need to physically return the product in-store or via shipping? What if it’s a service? Are they refunded in cash or credit card? Or is it a store credit? Is there a deadline for refunds?

All of these questions should clearly be outlined in your refund policy.  Your website is a great place to publish this information and an abbreviated form of your refund policy should be outlined on customer receipts.

Customer Complaints

If your customer has a complaint, how should they submit it? Is there a hotline to call, a suggestion box, or a form to fill out? If your business and employees are licensed, is there a government agency to write? A notice should be posted on your website and in your physical location describing where to submit complaints.

Shipping Policy

If you ship physical goods to a customer location, what is the cost of shipping? What is the expected delivery time? A shipping policy explains this as well as what can go wrong: If the item was never received, what should one do? Must you sign for a shipment? If you return a shipment, who pays the shipping? If an item is received damaged, how do you file a claim?

Payment Methods

What forms of payment will you take? If you take a check, what ID does the customer need to show? Do you take some of the newer forms of payment such as Apple Pay or cryptocurrencies? How do gift cards work?

Past-Due Accounts

If a customer doesn’t pay their bills on time, they should know what to expect. Will interest be charged? Will the account be sent for collections? Will someone break the customers’ legs? Will future purchases be cancelled or require a C.O.D. (cash on delivery) payment?

You might not think of your accountant when it comes to writing these policies, but you should; we can help. A good accountant can help you craft these customer service policies so that your communications and expectations with customers are better than ever.

 

Every business has customers, and while they all are important, most entrepreneurs will agree that some customers value your business more than others. This may be due to the amount of revenue they bring in, their ability to refer new customers to you, the interesting challenges of the business, or another factor. It makes sense to identify these people so you can spend more time with them or at least acknowledge them in some way.

How do you find out which customers have generated the most revenue with you? If you store data in your accounting system, you can run a report to generate the data you need.  In QuickBooks, the report is called the Income by Customer Summary Report.  In Xero, it’s called Income by Contact. If you do not store data in your accounting system, you may be able to generate a report from your billing system, shopping cart, or point-of-sale system.

The reports look like this: each row holds the customer name and the Income column holds total revenue. If your system allows you to sort the revenue field, do this in descending order. If not, you can export the data to Excel and then sort it.

Once you’ve sorted the data, the answer is right in front of you.  Your top customers based on revenue will show in order. These are the people you may want to consider spending more time with. Schedule periodic lunches with them, give them a call on a regular basis, and send them a gift or handwritten thank you note once in a while.  The report helps you organize your connection points so you don’t miss an opportunity to reach out to an important customer.

Run this report on a regular basis so that you’re focused on nurturing the most important relationships in your business. You can also look at trends to see if you’re losing revenue over time or gaining revenue with new customers. You can reach out to customers who are spending less with you to try to save the relationship before it’s too late.  And you can get to know new customers who are growing with you so that you can acquire even more business.

Make this report a regular activity in your business to stay close to what your customers are doing with you.

Having repeat customers is essential to many businesses, and the key to keep customers coming back is to provide them with great service. Here are five ideas to rate your business’s savvy when it comes to serving customers well.

  1. Make a great first impression.

When customers make a purchase from you, make them feel great about it by sending them a series of welcoming and onboarding emails. Congratulate them on the purchase, let them know how to get the most out of their new purchase, and encourage them to connect with you on social media and your mailing list. Thank them for their business.

  1. Measure response time.

How fast do you answer prospect and customer questions? Social media has changed the game. Customers who reach out via social media platforms, their phones, chat, or messaging apps expect an immediate answer.  Facebook even gives a badge to businesses who respond quickly and consistently.

Not only do businesses need to monitor messages coming in from a record number of places – email, phone, web forms, chat, social media, and more – they need to respond faster than ever.

Without measuring your response time, it’s hard to know how you’re doing, so putting measures in place is the first step to improving this customer service metric.

  1. Publish clear policies.

Good service starts with setting clear expectations. Before a customer buys from you, they should be able to know what your return policy is in case something goes wrong. Some of the policies that should clearly be published online as well as at all customer-facing business locations include:

  • Returns policy: If the product or service is not as expected, can the customer obtain a refund? Is there a re-stocking fee?  What about shipping?  Cash back vs. store credit?
  • Shipping policy: Most people expect free shipping these days. They will want to know what it costs and how long will it take to get the item.
  • Terms of service: Are there any limitations to the product? Or legal items that need to be communicated?
  • Privacy policy: All customers will be giving you private data. They will want to know if it’s secure, if you share it with anyone, and if you are compliant with laws like GDPR (Europe), the CAN-SPAM act (US), or CASL (Canada).
  1. Encourage feedback.

Your best ideas for new products and services can come from your existing customers. Ask for feedback by sending satisfaction surveys and requests for testimonials and reviews. Read what they have to say about your service so that you can make improvements as needed. Respond and thank them for the feedback

  1. Check your ego at the door.

As small business owners, sometimes we need to be humble, especially when things go wrong. Be generous with apologies; it will go a long way toward improving relations. If you’re at fault, admit it and make it right.  Even if you’re “right,” find a way to explain so that they feel good about you and your business.

Delivering great customer service can be a huge competitive advantage for your business. How does your business stack up against these five ideas?  Try them, and watch your business grow.