The single most important metric for a small business owner is cash flow. Since cash is usually very tight for every small business, being able to monitor and direct where your cash is going (operations, investments, financing) is ultra important. This is meticulously tracked through diligent bookkeeping and sound accounting practices. QuickBooks Online provides a fairer access to all the information as it is accessible via cloud and is available on desktop and mobile devices.
Revenue growth YoY is an important metric to determine the rate at which the business is growing. Most early stage businesses will have growth rates shaped like a hockey stick. Over time, revenue growth will slow down, but it should be an issue of concern if the growth rate does not increase or significantly slows down YoY. An efficient bookkeeper will help keep your numbers in check. Stilz Bookkeeping excels in neat, clean and accurate bookkeeping, helping you in the long run.
GPM gives you an idea if the business’s core product or overall business strategy is profitable. If the costs of manufacturing / producing and selling the product exceed the amount of revenues generated from the sale of the product, then the overall business strategy should be reconsidered. QuickBooks Online has excellent reports that allows you to view your revenue, direct input costs, SGA (Selling, General and Administrative) expenses and ultimately your net profit.
In general, for a growing business, the net equity of the business should be close to -0-.
This indicates that the owners of the business are funneling profits (if any) back into the business instead of taking it out of the business for themselves. For the business to grow rapidly, it is important that profits be redirected to capital expenditures, hiring new employees and expanding into new product lines to grow revenue.
This KPI shows how quickly the business is able to collect cash from customers. In an ideal world, you want this metric to be as high as possible. A higher number indicates a faster turnaround time. Since cash is usually very tight for a small business, it is important that your customers are paying on time.
It helps to ascertain beforehand the creditworthiness of potential customers by performing credit and background checks; there are a few cloud-based services that help small businesses perform these kinds of checks. Implementing proper bookkeeping using softwares like QuickBooks Online is essential. Furthermore, consulting a certified QuickBooks ProAdvisor can streamline your bookkeeping processes and improve your overall accounting efficiency.
Record keeping is a vital part of your company's bookkeeping activities. Without generating and maintaining suitable account records, you risk incurring higher costs in both time & money. Stilz Bookkeeping provides a one-time setup of QuickBooks, customized according to the accounting practices to match your business model. Ensuring that the completed books are beautiful, neat, clean, organized, matched and balanced on a monthly basis.
Disclaimer: The information provided in this blog is for general informational purposes only. It is not intended as accounting, tax, legal, or other professional advice. You should not act or refrain from acting on the basis of any content in this site without first consulting a financial or tax professional. We are not liable for any potential errors or omissions in this information or for any actions taken based on this information.
