If you want to be successful and ensure your business reaches its full potential, there is a multitude of numbers that you have to keep tabs on. Unless you are aware of your sales, profit and cash flow numbers, as well as a number of other performance indicators, you can’t make accurate forecasts and estimates that will help you to plan for growth.
Other Important Numbers
Most people are aware of the importance of the figures mentioned above, but your outsourced bookkeepers will tell you of many more. ROI is an important one. For example, when you start a new marketing campaign, it will probably cost you in cash and in time. You need to know how much it costs you and what return you get from your investment (ROI). If it brings more customers and more revenue you may decide to repeat the exercise, if not you may need to consolidate for a while before you investigate what didn’t work and decide to try something else.
If you are getting leads on potential customers, how much investment are you making in bringing them on board? If you keep tabs on your conversion rate, you will know how many leads you need to acquire and follow up, and how much you need to spend on it.
What is the average value of each sale or service product? How much do you need to multiply this by per week or month to break even or make a profit? Could you make improvements so that you can charge more and put up the revenue your sales generate? What would it cost you to do this, and would it be worthwhile?
At any given moment, can you state what your liabilities are, and when you must find the money for them? Can you put a figure on your receivables right now, or can you find it out quickly? How long before these payments will come in? Are the debtors all reliable so that you can expect payments on time? If not, when you plan your spending, you will need to disregard amounts you are not sure about. You really need to be measuring, averaging and estimating all the time.
Get the Help you Need
Staying on top of all these numbers can be daunting. But your bookkeepers can help you. If you are not confident about any of these areas, or any others that would be helpful to know about, talk to them about your concerns. They can produce the figures you need in reports from your accounting system, or help you to work them out from the data available. And they’ll always be happy to talk through what they mean to the business.