Basic accounting for small businesses
July 27, 2021
Starting to develop our small business can be described as a dream come true. However, as time goes by, when we have managed to overcome the investment and break-even stage, several questions start to rumble in our heads: Is my business profitable? Is it at least more lucrative than last year? Which of all my products or customers are profitable? Which ones should I discontinue?
These are just some of the questions we start to ask ourselves when the business is on track. We begin to question whether the processes we use are efficient, whether they can be improved upon, if we can delegate more functions to the team, etc. And all these questions have to do with business profitability.
How can I improve profitability in my business? This is one of the relevant questions we should ask ourselves when we have an enterprise or a company since there are always opportunities for improvement in every process.
Business profitability can be modified and improved, and if you do not know how to do it, do not do it alone. You can look for a financial advisor or an accountant to guide you on this path. That is why from Total Tax we offer ourselves as a business mentor to help you achieve business profitability in 10 steps.
The first thing that Total Tax offers as a financial advisor is a diagnosis of the situation of your company, to know where you are. As a next step, it is essential to redefine the business model according to the established methodologies. The third step is to set clear objectives, to then go to the fourth point; that is defining indicators that allow you to clarify the picture and convince you of the achievement: I must improve the profitability of my business.
As business mentors, the fifth step that we recommend from Total Tax is to study the scorecard, which is the one that will be in charge of directing the new orders in your business. As a sixth step, it is crucial to reevaluate the budget and carefully studying the fixed costs and variable costs. The next step is to focus on financial statements to acknowledge the results obtained in each economic period.
The eighth step is the monthly monitoring of the business activities. The ninth step is the financial inspection to know the accounting closing. The tenth and last step is the recalculation of the scorecard to know precisely where the company stands for the new measurement of business profitability.
“I want to improve the profitability of my business, but I don’t know how to”: that will no longer be your situation after following these 10 steps from Total Tax, your trusted accounting advisor.
