If you stop and think about it, doing your accounts because you have to for tax purposes is the wrong way to approach book-keeping – doing you book-keeping is for your benefit not the tax man’s!
Your financial figures are a great tool for providing a picture of your business – especially if numbers blur before your eyes then the graphic illustrated reports help enourmously.
Doing your books so that you can use the information to help you make better decisions about your business is a much more productive use of your time, with the added benefit that the tax side is all taken care of.
You should be doing your books at least once a month so that you have up to date information at your fingure tips.
Ok, so let’s assume for a moment that you’re entering the data at least once a month. Hurrah! But what next?
Well, you can now look at a bunch of different reports to see the patterns in your cash flow, who are your most important customers financially and where are your key expenses incurred? How do I do this I hear you clamour?
Here are a the key reports that should get you thinking (we’ve listed them as they appear in MyCake, but most book-keeping systems offer reporting in some format, although not as visually appealing):
- Income by Customer – a pie chart which shows you where your income has come from, you can change the dates on this to show you a few months or several years
- Monthly Income – this bar graph shows you how your income has varied month to month. It’s a good way to spot trends
- Expenditure by Outgoing Type – this is useful to see where your major areas of cost are e.g. travel, wages, phone, materials etc
How about using these reports in team meetings and in meetings with a coach, mentor or consultant?