Spending money on an accountant or accounting software seems counterproductive when your goal is to make more money, but investing in those services helps you track your finances to make smart financial decisions going forward. Learning how accountants can increase sales and profits helps you leverage those services to grow your small business.
Growth in business is a good thing, but quick growth can cause growing pains, especially when it is unexpected and unplanned. Sales forecasting helps you predict growth to ensure your infrastructure, customer service, inventory, and account management procedures can handle the growth. An accountant or accounting software helps you accurately forecast sales and finances to aid your company in expanding at a controlled, manageable pace. Use this information to make decisions that facilitate that growth.
Accurate invoices are crucial for positive customer relationships. If the invoice is lower than it’s supposed to be, your company loses money. If it’s higher, your clients have the headache of getting it corrected, and you lose credibility. Whether your accountant handles invoicing or you use accounting software to generate the invoices, accurate, timely invoicing keeps your sales going. Accounting services also ensure you find out immediately when an invoice goes unpaid. Receiving money on time is essential to the operation of your business. Your accountant provides information on different client accounts to help you identify your quality clients and those who consistently pay late or fail to pay completely.
Sales aren’t the only predictors of your profits. When your expenses skyrocket, your profit margins narrow. An accountant gives you a clear picture of all business expenses. Accountants can also tell you how those expenses stack up to others in your industry. Try to analyze this information closely to find areas where you can trim your expenses to increase profits. Expense analysis is an ongoing task since your profits and expenses change each month.
Service and Product Analysis
Do you offer more than one service or product? Do you know how each individual product or service performs? Accounting services give a clear picture of profits for various aspects of your business so you can identify your profitable ideas and potentially eliminate or revamp services that cause your company to lose money. By focusing on areas that make you the most money and improving or eliminating ones that don’t, your company makes more money and potentially increases sales.
Even if you only offer one product or service, an accountant can help you accurately price that item. Accurate pricing potentially increases your sales. If your prices are on the low end compared to industry standards, a realistic increase means greater profits. If your sales are stagnant, a slight decrease in pricing may be necessary to stimulate sales. Your accountant helps you analyze your pricing and makes recommended changes to ensure your profits increase.
Spending Decisions and Risk Analysis
Are you considering adding a new employee? Do you want to launch a new product? Are you ready to launch an expensive marketing campaign? Before investing in new ventures, work with your accountant to get a clear picture of your financial situation to determine how future spending affects your overall business. Your accountant can help you determine if the decision is a financially sound one based on the current market. Using accounting services helps your small business grow through accurate forecasting and data-driven decision-making.