Know Your Numbers – #3 Drilling Down
If you already complete numbers one and two of “Know Your Numbers”, then you should know how much your business is making or losing on a monthly basis, but do you know why?
If you run a business that provides different services, products or even operates from various locations, do you know what part of your business is performing well and which part isn’t? This is where cost centre analysis can really add value to your business and ultimately improve your bottom line.
By producing accounts for difference areas of your business, this will help you identify which services are doing well, which product types are achieving the greater margins or which locations aren’t performance so well. If you don’t breakdown your accounts and only look at the business as a whole, certain areas could be costing you to run without you even knowing it!
You may also be heavily reliant on one or two customers or locations, which can give you an even bigger problem should they leave, or you have issues with that particular location.
Most accounting packages, including QuickBooks and Sage, allow you to operate cost centres. This won’t cost you anything extra but could add significant profits in the future if used correctly. So, get analysing your Profit and Loss Account, start understanding where you’re making your money and begin to see improvements to that bottom line!
If you would like to get to Know Your Numbers, either complete the call back form below or call us on 01926 671870.