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Make your accounts work for you.

Make your accounts work for you is the rule you should apply to your accounts, everybody has to accept the compulsory invitation to the IRD party (there even has to be accounting for Taste) so if you have to do your accounts, or have somebody else do them, then why not turn them from a chore to a tool.

You either love accounts or hate them, let me take a wild guess that for you it’s the latter. They must be done so why not turn that negative into a positive and make those accounts give you valuable information about your business and help you make decisions from the information they can provide rather than relying on that gut feeling or wishful thinking.

Take for example what is your bestselling product/service, what does it cost you to produce that product/service? How much do you sell that product/service for? Therefore what is your return on investment (ROI) for that product/service? It may turn out that your second biggest seller actually returns a better ROI when costs etc have been deducted so maybe you should amend costs and/or price on product 1 to get a better return or start promoting product 2 which makes you more money.

How is this achieved? Well you set up your accounts so that when you process your transactions in your accounts your accounting software automatically applies costs/income against each product/service so that you can run reports on each to see how they perform. You already need to do the reconciling so adding that automatic extra layer takes no more time when reconciling yet provides great information.

You can also do this for adverts, if you are able to track what sales come from an advert you can apply the same tracking to income from the advert and then look at the cost of the advert against the income gained to see the ROI & whether you should continue running the advert if ROI is negative or maybe increase the advert if ROI is positive.

Your accounts are a chore but they must be done so why not spend a little time, or get your accountant to do it, to rework your accounts so they turn from a chore to a valuable business tool.

 



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