Although business was pretty good in 2019, there may be a few changes that will improve things in the New Year. After all, with the New Year comes a chance to start fresh. Time to turn over a new leaf and make a business resolution for 2020 that renews your commitment to an even more productive and successful business.
A great place to start is to determine what didn’t work so well and how you can turn things around. Set up guidelines that are sure to produce a favorable outcome for your business. There are 3 stages for deciding the “best practice” for a business, sometimes referred to as the three “I’s”, identify, implement, and insure.
- Identify. You need to identify the source of the problem. It could be in collections, late payments (yours or the customers), or meeting payroll. Are you having trouble keeping your customer base or keeping up with your inventory? If you don’t know where to start ask your employees for feedback. They deal with the customers on a daily basis and can tell you about issues that could be part of the problem. They may also have suggestions that could make things run more smoothly while making their job easier. A happy employee is a productive employee.
- Implement. Once you’ve identified the issues and worked out a solution, you need to turn the ideas into written policy. Hold an employee meeting to introduce the new policies and explain why the changes are necessary. When a business is doing well financially it’s good for everyone concerned. Forget the past and emphasize on the new changes. For example:
• Look at your pricing structure to check your profits. Make a schedule to evaluate your selling ratios
and run inventory reports regularly.
• Invoice at the time of service or shipment rather than monthly.
• Set aside a specific day of the month to take care of collections. If you don’t already have a good
bookkeeping software, get one. This will make it easier to keep track of your bookkeeping tasks.
• Estimate your income tax obligations monthly rather than quarterly. This will help to reduce or
eliminate any big surprises when the tax payments come due.
• If you have “remote accounting employees” that incur billable hours, have these employees use the built-in timer in your bookkeeping
software to track their hours.
• Cross-training your employees will ensure that you have an employee to fill in for another when someone needs time off.
- Insure. Finally, after you have your new work process in place it’s important to maintain it by intermittently evaluating its effectiveness. Schedule regular employee meetings to see what works and what doesn’t. Then, make adjustments where necessary in a timely manner. You may want to appoint a manager or individual to follow up with employees and departments.
At Summit CPA we offer multiple resources to assist you will your business needs. If you would like more information about the “best practices” for your business, contact our office at (866) 497-9761 to schedule an appointment with our advisors.