E-News - Four Things You Must Have! - Part III

Four Things You Must Have!
Part III of IV

Accuracy Greg Mcafee Whether it’s budgeting, record-keeping, sales, tax information, or a customer’s account history, a successful small business requires accurate bookkeeping. First, let’s look at the definition of accuracy.

ACCURACY - Freedom from mistake or error, or degrees of conformity of a measure to a standard or a true value by comparison.

There are many elements of our business that could be more accurate, but in my book, It’s My Your Dream, the importance of careful, accurate, and thorough bookkeeping are all discussed. From the very beginning of my business, I’ve made sure to have knowledgeable and dependable people to keep my books accurate, my monthly reports thorough, and tax information current. Unfortunately, this is one important area where many entrepreneurs think they can afford to cut corners. Oftentimes, when simple questions such as "What is your gross annual revenue?" or "What did you net?" these entrepreneurs have no idea how to answer, and may respond as follows:
  • "I have no idea."
  • "I think around..."
  • "Uh, well, I pay myself this amount..."
Most business owners do not need to know every aspect of accounting, but we MUST have access to someone who does. When we have a clear financial picture of our businesses, we can work to make improvements and adopt new and more beneficial strategies for success. When a business's books are properly maintained, it is possible for that business to reach new heights and become a successful venture. The careful documentation and monitoring of your daily revenue will provide you with a clear, realistic understanding of the areas in which you are thriving and those in which you need to improve. Just as a physical check-up helps you make sure your body is healthy and functioning properly, the financial health of your business is communicated via your accounts. Financials per department such as installation, service, and sales closing ratios are all important to know. Having comparisons of previous months and/or years will keep you aware of any changes that need to be made along the way.

In any business, maintaining the financial affairs can be a difficult job at times. It requires a knowledgeable, responsible, and dedicated person to perform the necessary tasks of properly handling the books. Many small businesses rely on outsourcing to a local, competent accounting/bookkeeping firm. This can be an excellent option as long as you are willing to check their recommendations and credentials to be sure you will be getting what you’ll pay for.

If your finances and records are in order, good for you! However, you might still need to seek accuracy in other areas, such as HR, inventory, or training. Remember, as Wyatt Earp put it, "Fast is fine, but accuracy is everything!"

Carry On!

Greg McAfee
Greg McAfee
HVAC Business Consultant