On behalf of the whole accounting profession, we are so sorry we got this the wrong way round!
Income – profits = expenses
Watch video: Getting your profits out first and your expenses last
Okay so you you might be thinking us a little bit mad here but hear us out as we explain this within our very first operational newsletter.
We as human beings surprise ourselves in terms of operating within our means.
Think about this – have you noticed how much we get out of the end of a toothpaste tube compared with when it is full – “just one brush then I’ll open the new one.”
Let us also think about some simple tricks to be more healthy:
- Want to eat less – try using a smaller plate
- Want to eat more healthily – start with the vegetables on your Sunday dinner rather than the meat and Yorkshire pudding
- Want to maintain this – get into a routine and get rid of temptation i.e. buy less alcohol, crisps and chocolate
Okay so we might give a little leeway on the last one.
By looking at the facts and figures in a different way can make a massive change to your business and we ask this of you from a business perspective:
“Do you know your top 10 customers based on activity?”
“Do you think additional sales is the quickest and biggest way to grow your business?”
If you start digging a little deeper with the second point; you might actually find you grow your sales by additional marketing but actually suffer on the bottom line as this group of customers is of a lower margin or even loss-making!
So how else are we going to help?
As we’ve mentioned in the video above we are going to subtly start asking of you; and in turn have you ask yourself, different questions to those you might have historically expected your accountant to ask.
We are embedding this into our processes, have been building out a “flagging system” within certain packages and will start talking more at a business level rather than just a financial level so that you the business owner are not left with the “scraps” as profits but instead start working up the food chain in your own business.
The data beneath the video is available for all clients who currently use Xero so if you want to have a discussion around your data then if you can just click here and answer a handful of questions then we will be in touch.
Want to know what potential is yet to be realised in your business? Mention that through the link above and we’ll even share a report on that for you.
