The importance of good accounting can’t be overstated. But Why? The truth is that having a good grasp on your books is a far more essential than simply knowing what money’s going in and out. Just as important are all the benefits that come from knowing your business’s performance. The way that gets tracked is often referred to as your Key Performance Indicators (KPIs), and profits are just the beginning. With the added ability to know your business that comes from cloud-based technologies, and hardware like the Poynt Smart Terminal, accounting and more is much easier.
Your profits and losses are, in a sense, the most obvious metric of success, but for good reason. It’s an essential way of tracking the growth of your company. From month to month, quarterly, and annually, if you know what times you are profiting (when your income exceeds expenses) and what times you are reporting a loss (where your expenses exceed your income), you will be one step closer to knowing how to improve your P&L, or at least plan around the lean times.
For some companies, billing is a crucial task, and one that tends to cause headaches. Granular, up-to-date reporting of the accounts that haven’t fully paid yet ensures that you aren’t shooting yourself in the foot, and that you aren’t letting payments fall through the cracks. When tax time rolls around, you may also run the risk of overpaying if you have an inaccurate picture of your outstanding balances.
Now let’s get granular. When it can seem that you fight for every single customer as a small business, but that doesn’t mean that every customer is created equal. As your business grows, the more you can learn about each customer, the better. By tracking income per customer, in both percentage and dollar amount, you are able to see what an average spender looks like, and also see who those big spenders are. Creating a profile of who those big spenders are is the first step toward getting out there and trying to find more of them.
Don’t be that business that collects sales tax and combines it with income. For most states in the US, you’re required to pay your sales tax either monthly or quarterly. That’s why it’s important to get into a routine for your tax payments, and be proactive. The proper reporting software is an essential part of making taxes practical, and less scary.
It’s normal to turn to the books to gauge your business’s success, but it just isn’t the whole picture. Once the accounting is clear, turn to knowing all you can about these measures of success.
How’s your business doing? With all these KPIs, you’d better hope that your point of sale can keep up with it. If not, see what Moolah can do for you. With our partnership with Poynt, new customers have access to a Poynt Smart Terminal, a powerful device that enables you to track your KPIs all across your business. It’s a powerful tool in turning knowledge about your business’s performance into the next step for growth.