Posts tagged ‘Management Information’

To many small business owners, administration and bookkeeping are a necessary evil of being self-employed.  Often managed simply to keep HMRC away from their door, the bank manager happy and accountancy fees at a palatable level, bookkeeping can be a time consuming and often monotonous chore, that steals time away from servicing client’s needs and therefore earning profit.

Have you considered using the results of your bookkeeping efforts to drive your business forward?

There are many ways that management information can help you to manage your business as well as complete your VAT return and keep an eye on cash flow.

  • It can assist the business owner in making good quality decisions
  • It can monitor performance indicators such as turnover against budget or prior year
  • It can help ensure you get paid for the work you do and manage financial commitments
  • It can highlight more profitable areas of the business, or potential to cut costs

Let me illustrate with an example.

A well maintained sales ledger, in a well constructed spread sheet or using software such as Kashflow or Sage, can improve cash flow, increase profitability and grow your business.

How?

  • By reporting customers in order of money spent, you can focus on providing your best customers with the best customer service, reducing the chance of them looking for alternatives or being as price sensitive.  This will also encourage advocates of your business, which will provide the best quality advertising at no cost.
  • Analysing debt by age can highlight poor paying customers who may indicate the need to improve the way you do business or highlight the need for more robust credit control.
  • You may decide that poor value customers or late payers are costing you too much in time and cash flow, so refuse to accept
    their future business or at least renegotiate terms.
  • Incorporating a little CRM (customer relationship management) data such as the source of the customer (e.g. advert, referral etc) can help you calculate the cost of acquiring new business and give you clues regarding your marketing spend.
  • Looking at accounts that have not been active for some time could highlight missed opportunities.
  • By improving the amount of cash flowing in to your business you can reduce the cost of finance and perhaps have more
    negotiating power when purchasing.

Not for you?

If the thought of devoting more management time generating information turns you cold, then outsourcing is probably your best option.  Many small business owners feel the need to control every element of their business and often consider cost to be a barrier, but in most cases outsourcing bookkeeping will pay for itself; by freeing up time to focus on the performance of the business or indeed to do more business.

To find out more about getting a return from your investment in bookkeeping, give me a call on 01480 426500 or Skype chat with tonimhunter.

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.

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j0433925There are statistics everywhere confirming that building business with current clients is far cheaper than acquiring new clients. I know this first hand being one who invests an inordinate amount of time networking both online and in ‘the real world’.  Here at George Hay we are regularly agonising over how to best spend our marketing budget, but at the end of the day the cheapest and the best business is that done via a qualified referral.  Also, although winning new business is exhilarating, doing business with clients who like you and appreciate what you do for them is very satisfying.

So what do I do to try and maintain client loyalty and hopefully enthuse them to tell their business associates about my good work?

Stay in touch
First and formost, I have found that clients like to be communicated with and want to “belong” to our organisation.  When clients feel that they are ‘out on a limb’ they are more likely to listen to gossip, be more receptive to your competitors or simply undervalue what you are doing.

Keeping in touch could be as simple as sending a regular newsletter or  involving them in your social media circles.  Of course, your top twenty clients (you do know who they are don’t you?) need more personal and regular attention, but that does not necessarily mean expensive wining and dining.  A simple ‘phone call to find out how things are going is all that it required.

Tell your client as soon as you can if an issue does arise and make sure it is clear how you will be dealing with it.

j0433028If my top clients prepare management information (which of course I encourage) or minutes of board meetings I ask to receive a copy by email so that next time we speak I have a subject matter to discuss that makes them feel good – their business!  This keeps the service personal and hopefully tailored to their needs.  Newsletters, blogs and emails are great ways to communicate messages but they are unlikely to be 100% relevant to your entire client base.  Also in a service environment, clients are buying personalities and a perception of knowledge, not something generated by your marketing team.

 

Remember if clients don’t know what you are doing, they wont want to pay for it.

So keep your clients informed.

You could also use this regular communication to survey clients opinions, if they are valued clients they will be honest with you and help you to appraise your operation, just as you help them with their business, but be warned if you have not made regular contact they may question your motives.

Take responsibility
If an issue does raise it’s ugly head or a mistake happens, correct it at the highest level.  Clients appreciate it when a manager/partner who can and will take action calls, rather than a junior person or an administrator.  Don’t forget an apology is what they are looking for, so make sure you eat humble pie whilst trying to convince them that the problem wont happen again! 

Never try and assign or delegate blame.  As a business person you are responsible for making sure your team are working to look after your clients.  Don’t let one department or staff member criticise another; it is unprofessional and clients will not be reassured.   Remember you have to work with these people, there are enough challenges in business dealing with external factors with out allowing conflict with in the organisation.  If there is a problem, everyone in the business needs to work together to resolve it and implement procedures to prevent it from recurring.

One of the biggest bug-bears of most people in business, I believe, is service professionals that over promise and under deliver, particularly in the early stages of a business relationship when they are trying hard to please or trying to win your business.  This is a major faux pas that most of us, if we are honest, have fallen foul of, so keep clients expectations manageable – and the easiest way to do this? – COMMUNICATE!

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.