Insights: Article

Six Areas to Focus on in Your Small Business

By Jenni Huotari

June 20, 2018

There are a lot of considerations that go into growing and managing a small business, especially one in the process of growing and improving, but it’s not always easy. In fact, often it might feel like your business just won’t cooperate and you’re losing control.

How do you get back on track and help your business live up to its potential? Here are six areas you as a business owner can focus on as you manage your business:

Sales
Sales figures can help you determine revenue and inventory purchases, so keeping accurate records is important. To do this, implement detailed policies and procedures for all types of sales, whether it be cash, checks, credit cards or online sales. Consider using an invoicing system when shipping goods and having proof of delivery when goods are shipped. Also, be sure to check your invoices against sales and payments to ensure everything matches up correctly.

Accounts Receivable
Income from your operations keeps your business going, so making sure you collect, and on time at that, is very important. To keep up on AR, establish collection policies in writing, and make sure to follow through on implementing these policies. Here are some ideas:

  • Establish a solid system for billing, such as numerical or batch processing
  • Have a timely review process for all accounts
  • Keep your accounts receivable separate from cash
  • Have security measures in place for communicating

Accounts Payable
Just like it’s good when your business receives cash, other businesses need to be paid as well. Keeping up on payments can help your business establish a trustworthy reputation which can ultimately lead to more success and growth. Unfortunately, AP is an area that many businesses struggle with. To stay out of hot water in this area, consider setting up procedures for cross checking payments, always check pricing options from competitors and vendors and be sure that billing amounts are being entered correctly.

Cash
Businesses that accept cash (especially a lot of cash) are at a high risk of loss due to theft or other discrepancies and errors. Keep your cash in control by having employees balance cash at the end of their shifts, have controls in place to ensure employees can’t pocket the cash without entering the transaction, check and reconcile bank balances regularly, keep all cash payment methods secure and pay attention to your business’s cash flows.

Human Resources and Payroll
Technology has made it easier for hackers, scammers and even bad-egg employees to commit fraud or other harm to your business. To keep your people (and your business) safe, consider the following:

  • Require password updates regularly- for you and your employees, and make sure to keep all passwords safe and not written down.
  • When it comes to payroll, review the details and checks/direct deposits to make sure pay is being disbursed properly.
  • Pay attention to any differences between payroll expenses and monthly budgets – this could be a red flag that someone or something has gotten access to your books.

Physical Assets
The physical assets your business owns, such as machinery or laptops, are of great value to your business – you don’t want anything happening to them. When it comes to laptops and other electronics, make sure they are safeguarded or locked up. This makes it difficult for someone to steal the physical piece itself, along with the information stored on it. Cyber security problems are on the rise, so keeping these assets on lock down can help prevent data breaches and other cyber-crimes. Record asset purchases and monitor use and depreciation on them to stay up to date on their value. Also consider setting a usage policy so assets aren’t falling into the wrong hands or being mishandled.

The moral of the story
While there are many areas of your business that deserve your time and attention, these are some areas that can help you keep control over the growth and direction of your business.

Your accountant should be able to help you set goals and policies to ensure that everything is running smoothly in your business. By talking through these, and other, metrics, you can put your focus back on your business and managing its success.

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