What types of metrics should I be measuring for my business?
The types of metrics you use in measuring your business's success depend in large part on the type of business you run. If you are a business owner who works in a service industry, like accounting, you will want to measure the amount of revenue your employees generate for the firm versus the amount of time they spend on each client. If you are in an industry that sells goods or inventory, like a retail store, you will want to measure the actual sales receipts versus your overhead costs.
No matter what type of business you run, it is important to be very sure that you understand how your cash flow is affected by various factors, including employee costs. You should also measure the impact of programs and decisions on employee morale. If your employees are happy, they are far more likely to be productive than if they are unhappy.
Why should I hire an accountant?
There are many reasons a business might wish to hire an accountant (https://www.pinterest.com/SterlingMGMT/). For one, accountants help a business understand how money is flowing into and out of the company and identify areas of spending or cost that may be excessive. Furthermore, accountants often handle the day-to-day bookkeeping that can be cumbersome or even impossible for some business owners. Finally, an accountant keeps track of payroll, inventory and other important information for tax purposes and often files the business's tax returns.
When a business hires an accountant, the company's financial information should be kept in good order and the owner should be able to request and receive understandable reports that show cash flow, accounts receivable and payable, interest on loans, depreciation of equipment and inventory control. The accountant (http://www.yelp.com/biz/sterling-glendale-2) should communicate with the business owner, particularly if he or she notices irregular receipts or spending and other financial transactions that could signal problems for the company.
What is the difference between a CPA and an accountant?
A CPA (https://twitter.com/sterlingmanage1) is a special type of accountant that has successfully passed the Certified Public Accountant exam for the state. Some states also have a "public accountant" designation that signifies that a person has a degree in accounting but has not taken or passed the CPA exam. Whether a person is called an accountant or a public accountant, unless he or she has sat for and passed the state exam, the individual is not entitled to call himself or herself a CPA (https://soundcloud.com/sterling-management).
Many accountants pursue the CPA (https://www.flickr.com/photos/sterlingmanagement/) designation because they believe it shows their clients that they take their professional commitment seriously, and many clients prefer to hire a CPA because they feel they are getting better service. While an accountant who is not a CPA can still handle most or all of the tasks assigned to an accountant, seeking a CPA designation often gives an accountant prestige that he or she cannot acquire in any other way.
How does Sterling CPA help accounting firms?
This company helps accounting firms, as well as other types of businesses, maximize their profits and their productivity by using measurable standards to determine if employees are producing an acceptable amount of revenue. Often, businesses assume that those who are the busiest are the most productive but this is not always the case.
In fact, sometimes the "busiest" employees actually produce the least amount of revenue in a thriving business. It may be that the quiet employees who are never noticed are the ones making the most money for the company. It is important for businesses to use calculated metrics to determine which employees are generating revenue and which are simply costing the company money and to implement systems to hold employees accountable for their productivity.
The firm helps their clients implement these types of protocols so that they can increase their profits significantly. With their help, some of these businesses have been able to increase their profitability by two or three hundred percent within a few months.
How can software help my business?
The advent of computer technology has been a boon for businesses of all types. Suddenly, accounting procedures that took days take only minutes. For example, most businesses that need to hold and control inventory are now using automated systems to swipe the items and to enter them into a database automatically. This saves manpower and time as well as enabling the company to know exactly what they have in inventory in any given moment without waiting for a daily or weekly report.
Software can also help businesses in other ways beyond simple accounting. For example, some software platforms are designed to increase productivity and track work so that businesses can easily learn who is performing and producing and who is not. Tracking productivity through the use of software is one way for a business owner to quickly make substantial changes that will have a significant impact on the business's profitability.
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Is there a way to measure my business's true productivity?
There are ways to measure productivity as opposed to simple cash flow using proven metrics and targeting both concrete and abstract business factors. For example, you can simply measure how much your employees bill your clients and learn what your accounts receivable are, but that number means little without context. Are the employees you are paying the most money to billing the most? Are they collecting what they bill? What is the true cost of having that employee in your business? Generally, employees must bill a minimum of two to three times their salaries in order to be considered valuable and productive.
If they are not billing and collecting at least this amount, it may be time to start tying their compensation directly to the amount they bill and collect rather than giving them a salary. This method has often worked to quickly increase productivity or to identify employees who may be mismatched with their jobs.
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Why is my business losing money?
There are many reasons businesses lose money, but the most obvious ones, such as theft or a disaster, are rarely the cause. More businesses fail because of lack of productivity and misplaced resources than any other reason. Ironically, business owners may not even realize there is a problem until the business is already in serious danger because these leaks may be so small. For example, one employee who looks very busy but is producing little to no revenue can cost the company tens of thousands of dollars per year in salary and benefits without contributing anything to the corporate income.
In order to identify and stop leaks of revenue, it is important for business owners to know how to measure employee contributions and stop wasteful spending of time and resources. With the right programs in place, business owners can increase their companies' productivity and earn more money while actually doing less work.
What areas of my business should I inspect for lost productivity?
There are several areas that are common culprits when it comes to a business's problem of "bleeding money." For one thing, lost employee productivity is often linked directly to morale. When employees are not rewarded for their hard work, they see little value in continuing to put forth the effort. On the other hand, when employee compensation is tied to performance, it is often a good motivator for them to work harder.
However, hard work is not the only thing that will stop poor productivity. Sometimes having the right tools and learning to work "smarter" instead of "harder" is key. When employees are given the right support to do their jobs well and are consistently rewarded for measurable outcomes, they tend to perform very well and to take a more proprietary interest in the business. This is a key factor in assessing business needs and increasing profits for any company.
How can I make my business more profitable?
Making a business more profitable may not be a matter of making more money. It may be a matter of keeping more of the money that you make by cutting down on overhead or costs. For example, if you are paying an employee to manage something that could easily be done by automation, you are spending far more than you need to get that job done. It is very important to review your outgo in order to maximize the amount of your money that you can keep.
Some things, such as taxes or rent, are already set and there is little to no way to reduce those costs. However, some costs are very controllable, such as what you pay your employees. While you may have to have workers in order to get your jobs done, you can hold those workers accountable for their productivity if you have the right tools with which to measure true output.
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How can Sterling Management help my business become more productive?
When it comes to helping businesses become more productive, there are ways to increase profitability simply by changing the way things are done. For example, many business owners find that when they use true metrics to assess the way they are operating their companies, they realize that they are not making as much money as they should. The processes, software and metrics used to assess a company's productivity should always focus on the true cost of operations and how much money employees are bringing into the business.
Owners are often shocked to find that employees who are truly working hard are costing the business money, while those who seem to be slacking may actually be earning more, and could earn even more money if properly motivated. When these types of factors are assessed for a business, the owner will quickly learn how much he or she can increase profits and income.
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