04 Jan Consulting and Managerial Accounting
Roger has a concrete business and became frustrated with his bank account balance. He wasn’t sure where his money was going and why he wasn’t making as much money as he thought he was making. He kept replaying things in his mind, but just couldn’t figure it out.
Few people can play a complete chess game beginning to end in his or her mind. Business is so much more elaborate, but the same concept applies.
No matter how simple your business may seem, there are many working parts to keep track of and if you are like most business owners, keeping track of it all just in your mind is nearly impossible.
The daily planner people took this idea to the bank because they knew that something written down is much more easily achieved. The same is true when I begin consulting or preparing a managerial accounting system for a client.
The first thing that I did when Roger called me for help was map out every system and process so that we knew who was doing what and in what order. When this was down on paper, it became so much easier to lay out a plan for improvement and put together the numbers to do it.
We found several spots in Roger’s process that were less efficient and he has put together a plan to make improvements.
We have also put together the numbers for him so that he knows how much work he needs to break-even, how much it costs him to keep his doors open even if he isn’t doing any work and what his minimum mark up has to be in order to cover his costs.
Roger is no longer surprised by the amount in his bank account and knows how much money he can plan on having each month. Using these numbers, I have helped Roger put together a budget that includes getting him completely debt free in 18 months!
As a concrete guy, Roger understands the importance of a solid foundation. He knows that his accounting is the foundation of his business and that…
…Your business THRIVES on a solid FOUNDATION!!!