Jennifer is a dentist in private practice. She was anxious to look at improving profitability, and personal income; and was a bit stressed over some business expenses she had to make in the upcoming months. She had scheduled a meeting with a financial planner, and he had asked her to bring along some information that she couldn't put her fingers on.
As we spoke, it became clear that even though she had been in business for over 15 years, that she had never focused on her business finances. And although she came to my office prepared to roll up her sleeves and work, there was little we could do, because her record keeping was somewhat haphazard.
It took a month or so, but with the help of a good bookkeeping service, we got her up and running on Quickbooks pro.
Once this was done, it was easy to sit down and analyze what was happening. We looked at overhead, profitability, payroll, her patient roster, health insurance payments, receivables, payables and cash flow. Here's what we found:
1. She was spending lots of money on an advertising, but had little to show for it.
2. Her overhead expenses had increased substantially over the past year, but sales had gone down.
3. Way too many of her accounts were past due.
4. She was carrying too much inventory.
Knowledge is power. Armed with this information, it was easy to see what had to be done to get her business back on track.
Do you know what needs to be done to help your business?
Susan Martin
This is a pertinent post. I truly appreciate your effort to inform us. Many thanks for sharing this. Glad I came across this site.
– Jaime
One of the benefits of having a good bookkeeping practice is that you use your bookkeeping system to track your advertising and marketing dollars to sales. You monitor your overhead expenses ensuring they are not increasing faster than your sales. You use available reports to collect your accounts receivable, manage the payment of your bills, and keep an eye on your inventory levels.
If you’re a business owner,you can’t afford to take for granted the accounting piece of your business. You either need to find ways to keep on top of it or hire someone who’s knowledgeable and skillful enough to fulfill that function for you. Make it a priority to gain the knowledge you need to effectively oversee the business side of things so you can focus on the fun part of your business.
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