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Bookkeeping – Train, Troubleshoot or we do the books for you! MYOB Reckon Xero & Set Up


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Cashflow Tips – Cash Flow and Budgeting – What are they and how are they different?

Cashflow Tips - Cash Flow and Budgeting – What are they and how are they different?

Cash Flow and Budgeting – What are they and how are they different?

They may sound too hard or scary, but cash flow and a budgeting can show related information – so what are they and how are they different? There is a difference and each have different uses, but mainly they help the business owner in the financial management of the business or organisation.

Cash flow forecastis an estimate of the amount of money (actual cash) you expect to flow in and out of your business and includes all your future income and expenses. A forecast usually covers the next 12 months, or it can also cover a short-term period such as a week or month.

  • It predicts when the actual income and expenditure occurs in the actual bank account(s).
  • Does not consider accruals and adjustments such as depreciation, only ACTUAL cash in and out.
  • Large capital purchases such as assets (usually not recorded in a profit and loss and budget) are included in a cash flow forecast, as to HOW they will be paid – eg show loan money in and payments out – fully paid or the instalments on loans/finance.
  • The full year cash flow forecast is usually shown on a month by month basis. But in it can be broken down into fortnightly or even weekly depending on the requirements.
  • More info and a handy FREE template http://www.business.vic.gov.au/money-profit-and-accounting/getting-paid-on-time/cash-flow-statement-projection-with-template.

Budgetdetails overall what you plan to do with your finances based on expected sales and expected costs, and is similar to Profit and Loss (and a Balance Sheet). It is used to measure how you go against the budget – are you on track for what you want to achieve?

This is usually over 12 months, and focuses on profit. In addition:

  • Accruals and other non-cash adjustments such as depreciation are included;
  • Large capital purchases will be included;
  • A budget also provides a benchmark to then monitor performance – after each month accounts are finished we compare what actually occurred against what was budgeted or planned to occur;
  • Usually the full year budget is prepared in months like the Profit & Loss;
  • A budget is NOT used to monitor the amount of cash in the bank accounts. That is where the cash flow forecast comes in;
  • Some further information is here – http://www.infoentrepreneurs.org/en/guides/budgeting-and-business-planning/.

Both Cash Flow and Budget detail the planned financial goals the organisation is trying to achieve and are linked to the strategic and business plans of the organisation. The main difference is based on:

1.     The type of the transaction and;

2.     The timing when receipts and payments will occur.

As a simple example: A budget will record the income when you have sent out the invoice whereas your cash flow will record it when you actually receive the amount in your bank account. Always remember not to assume that debtors will pay the following month. Often it may be later which is why it is important to know your Average Debtor Days which may show that payment occurs typically 64 days after sending out the invoice. This would be reflected in the cash flow, but not the budget.

Need help? Not sure? Call for FREE 30min advice / strategy session today!

Call and you also get FREE “Avoid these GST mistakes” – There’s 18 that the Tax Office see regularly – Get them right!

Email info@accountkeepingplus.com.au or call 0407 361 596 Australia

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Cashflow Tips – 5 tips to get more from your accounts/bookkeeper – or how to be a better bookkeeper

Cashflow Tips - 5 tips to get more from your accounts/bookkeeper – or how to be a better bookkeeper

Cashflow Tips – 5 tips to get more from your accounts/bookkeeper – or how to be a better bookkeeper

Do I have the most suitable software for the business needs? Should I upgrade to the next level or another brand? We can help you for FREE – call for a chat!

  1. Expenses we can reduce? What areas of expenses have increased, and are there better deals to reduce costs?
  2. What areas/products of sales are growing? Can we see a trend in products or categories that are underperforming? What about the best performers – should we focus on building them more?
  3. Checklist of the bookkeeping tasks so we don’t forget? Do you have a checklist – there can be at least 10 and more tasks each week/month – invoicing, paying suppliers, payroll, super, Workcover, collating customer payments, reconcile bank statements, reconcile credit cards, petty cash – if you want a template to track the main bookkeeping tasks, call or email info@accountkeepingplus.com.au 
  4. Better Reports for more insight? What other reports does the software offer? I find that exploring other reports and seeing what customization is possible can reveal new reports and insights that help make better decisions!

DOWNLOAD a FREE “Bookkeeping Quarter Checklist” to get organised! CLICK HERE

Need help? Not sure? Call for FREE 30min advice / strategy session today!

Email info@accountkeepingplus.com.au or call 0407 361 596 Australia


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Cashflow Tips – A cool tool to see what affect changes make on Cashflow

Many run by gut or the bank balance early in running a business – but understanding your cash flow is critical to your business success, and a handy tool that bank NAB have created is an online cash flow improvement tool. Whether using MYOB, Reckon/Quickbooks or Xero for bookkeeping, Try it and see what you think! (Click icon to go to the page)

Cash Flow Imp CalcLet us know how you went…

For other NAB cool tools see Calculators and tools

Also see Cashflow Tips – 5 Ways to Keep Cash Flowing

Or Cashflow Tips – To Discount or ADD VALUE?

DOWNLOAD a Free “Bookkeeping Quarter Checklist” to get organised! CLICK HERE

Need help? Not sure? Call for FREE 30min advice / strategy session today!

Email info@accountkeepingplus.com.au or call 0407 361 596 Australia


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Cash flow Tips – How a focus on Key KPI can impact growth – how we help our clients

Cash flow Tips – How a focus on Key KPI can impact growth – how we help our clients

Cash flow Tips – How a focus on Key KPI can impact growth – how we help our clients

Account Keeping Plus has seen real-life examples of results when you focus on Key Performance Indicators (KPIs) to impact your business growth, but coming up with which KPI numbers can seem difficult.

In fact it’s as simple as this: start with a pool of numbers that seem as though they could be important to your overall success, then rule them out one by one until the pool is small enough to count on one hand. Those are your KPIs, or critical numbers.

Here are some ways to generate a pool of possible KPI or “right numbers”:

  • Start with your top-level financial goals and targets such as the specific numbers that define success for your company.
  • Look at the things going on in your market and industry. What are the trends for the last few years? What are your customers and employees saying?
  • Look at your financial statements. Often times, the “right numbers” will include sales, gross profit and net profit from the income statement. Balance sheet numbers might include level of cash, accounts receivable, debt and equity. You may also calculate various ratios such as gross margin percent and current ratio.
  • List all the vital areas of focus – customer service, marketing, sales, products and services, production and quality – then drill deeper into each of them. These may be your various departments or they may be workflow functions independent of the department.
  • Don’t focus only on just financial measures. Operational numbers (i.e. web hits, turnaround time, customer satisfaction, etc.) can be especially helpful in analysing the progress toward your most important goals and growth.
  • Ask yourself these two questions: What numbers do you and your people currently monitor on a regular basis? How did you choose those numbers?

Now that you have a BUNCH of numbers, start the elimination game, as here is my final piece of advice for determining the metrics you’re going to track:

  • Keep the amount of information to a handful of KPI critical numbers so your attention isn’t spread. Just because you CAN measure something doesn’t mean you SHOULD. Sometimes, Less is more. Consider also having key managers taking on some of the KPIs that relate to their area – finance, production, operations, sales, marketing, etc.

Once you’ve narrowed down your KPIs, ask yourself and the team one more question: Are we monitoring the right numbers? Usually time will tell – it sorts out over a period – you’re not going to know your essential and critical numbers right away, and other times you’re spot on.

Finally, it is critical to create a system to organize your numbers. For this, consider starting a dashboard for all to see.

One client of ours, instead of showing the $, prefers to show Quotes and Invoices as Hours, with minimum targets monthly for each. So once we have checked all the accounts receivable is reconciled to deposits in his Xero, we run reports on the previous month total Quotes and total Invoiced. In excel I have created a template to enter this raw data, which is automatically converted to a number called hours (which is derived after financial review of the required $ per hour minimum to cover the business costs and wages and super currently).

I then post the numbers – above or below the Min. target on a white board in the office so all can see.

When targets are met they celebrate, when they aren’t they try to work out what has changed or been missed, and make changes to stop the retreat. And it’s engaging all staff, and creating a team effort! The KPIs are WORKING!

They are part of the AKplus service he receives from us, which includes a Business Health Review of other KPIs – Sales, Gross & Net Profit, Current Ratio. See Services in the Menu, and call to ask us to send a FREE sample of how we help businesses understand the numbers, and GROW!

Need help? Not sure? Call for FREE 30min advice / strategy session today!

Call 0407 361 596 Aust