As Small Business Owners, we have many things that we have to accomplish. Delegating duties to staff is vital to being able to keep everything functioning as it should. This is especially true in the area of bookkeeping (accounting). Most small business owners are not accountants. This usually puts the accounting duties high on the list of duties to be delegated. For most of the accounting duties, this is a very good idea. The day to day detail activities required to prepare your financial statements don’t produce any additional income for the business. You need to monitor the duties, but a good detailed bookkeeper can perform these duties for you.
However, there is one area where the bookkeeper is not necessarily the best person to drive the process. That is the preparation of the Annual Budget. This does not mean that you can’t have your bookkeeper help you. Most good bookkeepers are process and task orientated people, who look at the things they do as something to be accomplished as efficiently as possible. This is very good for the day to day accounting tasks and for doing the mechanics of entering budget numbers. But having the bookkeeper prepare the budget on their own will not result in the best budget for your business! Why? All the numbers will be there, but they won’t necessarily be the optimal numbers that will maximize the profit for your business.
As the leader of your organization, it is your job to set the vision for your business. This does not only apply to the products and services that you are selling, but it also applies to how you are spending your money. Are you really getting the most from what you are spending, or are there areas where you can save money? Have you thought through how you are doing things to ensure everything is running the way you want it to? These are the things that many bookkeepers will miss unless you guide them through what you want in detail, in effect assigning them a specific task to accomplish. Remember a bookkeeper does not have the same heart for your business that you do.
Lead your company by setting a goal for the budgeted profit for the year. Give yourself something to work toward. If you don’t have a goal in mind for your profit as well as your sales, you will likely end the year with great sales and wondering where the money went. People get what they expect, and if you expect little or nothing, that will be your result. Said another way, if you expect nothing, you will get nothing.
Setting your profit goals involves understanding your business and running it like a business, not a set of automatic tasks to be completed. To do that requires that you regularly review all aspects of your business. This review is a vital component of creating your budget, if you want a budget that will help you maximize your profit. You need to take a regular deep dive into what you are doing. Try to review all your processes and procedures every 12 to 18 months. Monitor what you update so you can verify that you get the expected gain in time and expense efficiency from the update. Reduced expenses mean more money in your pocket!
Remember that you get what you expect, set your expectations high and operate your business at peak performance!
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