Business Tip Vol. 6 - Accounting Systems

How are your accounting systems?

In my 22 years of working in the accounting/banking business, I have yet to run into an entrepreneur who was a great financial person.

It stands to reason that most business owners are out to sell and make, not to count.

For most business owners, their financial analysis consists of this question... How much money is in the account? A lot means you're making money; not such much means you're losing money.

But there is so much more to good financial analysis, all of which could mean more profits for you in the long run.

How is your current ratio? What about your projected debt service? Are your inventory turns improving? What are your future CAPEX requirements? How are your profit margins holding up to industry standards?

I can attest to my own business, once I started really looking at my numbers and getting a true view of the financial strengths and weaknesses my profits started going up.

Just taking a couple of hours a week looking over the financial side of the business is 90% of the battle. Once you become conscience of the company's weaknesses, you can address most of them in the general operation of the business; thus improving profits.