Try these Six New Perspectives during your next Month-End Review
While Net Profit and your cash balance are probably the first two numbers you look at on your monthly financial reports, those aren’t the only important factors you should be looking out for in your regularly scheduled reviews. You can glean a lot more gems by digging a little deeper and looking at your data through any of the following six perspectives.
Look at your labor detail reports and professional and outsourced expenses to see where you could be automating specific tasks or work types. For example, adding more automation to your workflows could be as simple as automating your team’s calendars so that your admin professional(s) don’t have to spend as long coordinating between other team members. Additionally, if you find that duplicate data entry is driving up costs, reach out to us about integration solutions like Zapier that could free up more time to keep your employees working in their most profitable capacities.
Duplicate or Excessive Expenses
Have you noticed that you’re paying for things twice on your Profit and Loss Statement? Or, are there services, applications, or other expenses you could cut back on?
An area you might see duplicate spending, for example, is insurance coverage. Perhaps your liability and your business umbrella both cover worker’s compensation; see what you can do to reduce the overlap.
A significant example of excessive expense could be your rental. Especially in today’s environment, when many employees are working on a fully remote or hybrid basis, or your overall team is reduced, your office rental could be costing you more than it needs to. For example, if you rent 5,000 square feet but now only need 2,000, see if you can re-negotiate your lease, sublet that extra space, or move to a location that more suits your needs.
Lastly, retainer and recurring expenses should be scrutinized; are you getting what you’re paying for? These opportunities could lead to increased services for the same cost, or you might be able to negotiate for a lower fee.
Remember, all because you can do something doesn’t mean you should. Are there tasks or work that an outsource company could do cheaper and better than you? If so, outsourcing could be a profitable option to look into further.
Indications of Fraud, Theft, or Excessive Risk
As owners, we need to protect our business investment, and we should always be on the lookout for signs that our investment may be at risk. If your numbers look odd or unexpected, you should be skeptical and investigate further.
Tax Savings Situations
Investing in tax planning almost always yields the best results, especially this year with new tax relief available to qualifying businesses. Get help from a tax professional to see if you qualify or close to qualifying for tax deductions, credits, and savings.
This list would be remiss without mentioning the obvious opportunities of finding ways to grow sales. Your sales results can give you an idea of where more growth can occur, where promotion opportunities exist, and where completely new revenue sources can be created.
So the next time you review your financial reports for your cash number and net profit, take a closer look through these six filters to extract insightful data on how to run your business better.