The Accounting X Factor for Bookkeeping Financial Reporting
Accounting combined with Bookkeeping Financial Reporting, not the reality TV show with aspiring singers. However it does share something in common. Both require a good deal of courage, and there’s still a good deal of judgement and consequences when things go wrong. Many entrepreneurs throw their hands in the air and give up on controlling or wrangling with their financial affairs. Often they give this over to their accountant who takes complete control of the budget. Although this often means that they give up valuable learning opportunities.
When speaking with your accounting services specialist, do you ask lots of questions? As the old saying goes, the only silly question is the one that’s not asked. These questions are never easy, but when you start asking them you will find a whole wealth of information about bookkeeping, accounting, and financial reporting with City Tax Accountants.
Here are some very helpful ways that you can get the most from your accounts.
1. Set Goals: Create goals for sales, expenses and profit. This gives something to review against, and helps to create the focus of where the business is heading.
2. Review, Review, Review: Reviewing the results on a regular basis every month, quarter and year. This will help you to get familiar with the patterns that frequently occur in the numbers, pretty soon you will begin to see patterns.
3. Financial Jargon: Understand what break-even is and why profit and cash are not the same thing (although similar). And learn how to plan for investment and growth.
4. Have an Inquiring Mind: Always ask pertinent questions of your accountant and bookkeeping business. Here are some pertinent questions to start with:
Important Questions to Ask Your Accountant
How Does My Business Fare Against Competitors?
Your accountant or bookkeeping financial reporting services will be able to help you to build up a business benchmark against competitors in your industry. This is a very efficient way of gauging the performance of your business in terms of wages, percentage of sales, and profit and loss that is incurred in various parts of the business. This will show up areas that require some tweaking.
Please explain cost of goods sold…
Cost of goods sold or COGS, are the costs that are incurred during provisioning a sale. This includes all of the costs directly attributed to sales acquisition, and turning raw materials into finished goods. Items that are detailed in COGS will differ from one type of business to another. By lowering COGS, a business will increase their gross profit margin. COGS will of course vary, dependent upon the level of production or business activity. Some bookkeeping companies will expect their clients to work everything out themselves, and not offer any help. This is where City Tax Accountants is different. Turn to bookkeeping Sydney for detailed and comprehensive advice at a competitive rate.
Please explain gross profit margin…
Gross profit margin is the difference between the value of sales and the cost of sales. Understanding this figure is crucial for building profit. So a small business owner should speak with their accountant to clarify this further, what it means and how to get more gross profit margin. Two ways of getting more gross profit margin are to increase the selling price or reduce the COGS. For more detailed information about increasing gross profit margins, visit City Tax Accountants, the Sydney bookkeeping specialists, who pride themselves on their expertise and experience for the Sydney CBD. There are plenty of Sydney accounting firms, offering bookkeeping greater metro Sydney, very few offer the personalised and friendly service for businesses of all sizes.
How can I reduce my expenses without compromising on quality?
Take a good look at where the money is going in the business. Often the little things will begin to accumulate in cost. There are ways to cut unnecessary expenses or eliminate them completely. Aspects such as paper, printing and mailing can be reduced through issuing invoices and quotes on email rather than posting. Another viable option could be remote or virtual office management, where the team works from home, saving on the overheads of an office all together. There are plenty of services, taxation accounting and bookkeeping Sydney is full of them, but expert help is close at hand, with City Tax Accountants.
How much is the business making (net profit)?
The average small business in Australia can make around 10%net profit each year. However, this lately depends upon the industry type. An accountant will be able to advise on business benchmarks and industry comparisons, so that you will be able to get a greater feel for the business and where it is headed, relative to your competitors.
What is the break-even point?
A break-even point is where the business either makes net profit or loss, depending upon the outcomes of the financial year. The break-even point is vital to a business owner as this is the point where they will start to really earn income.
A break-even point can be calculated at any given point in the tax year. It can also be calculated for any time period such as a year, month or quarter. Determining the break even point will enable a small business owner to work out the lowest price than can be offered for goods and services, and the effects that discounting will have on the net profit. Take a look at the website of City Tax Accountants, they offer bookkeeper services that will beat any other bookkeeping companies Sydney has to offer.
How can I improve on ROI?
In other words, which of my services or products is making me the most profit? As a guide, look at the profit margin of each service or product. Then only keep the ones that are yielding the highest return, along with the least effort. Anything that takes a lot of effort but provides a low profit margin, is really not worth the time. For more guidance, speak with Sydney bookkeeping specialist – City Tax Accountants, they offer everything from a-z bookkeeping, accounting and taxation for SME to corporate sized businesses. Sydney bookkeeping just got easier!
Are you still needing further clarification about this? It’s best to speak with a team experienced with bookkeeping Financial Reporting, City Tax Accountants. They offer a far more competitive and thorough service than other bookkeeping businesses in Sydney.