The process of completing your bank reconciliation is to “tick and flick” the transactions that appear on your bank statement against the transaction you have entered in your accounting system. When all transactions have been confirmed on both your bank statement and your accounting system you can pat yourself on the back as your bank reconciliation is complete!!

What purpose does a bank reconciliation fulfill? A completed bank reconciliation confirms that the transactions that appear on the bank statement have been entered into your accounting system. However, whilst the bank reconciliation confirms that all transactions have been entered  into your accounting system it does not confirm that the transactions have been posted to the correct accounts. To do this you should also perform a general ledger reconciliation, debtor reconciliation, creditor reconciliation and payroll reconciliation. But at this point it all become too much for business owners who don’t have dedicated accounting skills.

But, to be sure that you accounting reports provide a true and accurate representation of your business activity you should carry out each of these reconciliations every month.

For more on reconciliations our specialist Newcastle Bookkeepers have the skills to help you make the most out of your cash and ensure that your bookkeeping problems are solved quickly. For a complete list of bookkeeping services contact Shelley on 0412 481 559.

At Bling Bling Bookkeeping we investigate cloud computing applications and decide which ones may be applicable to our clients. Cloud applications that we use include accounting  systems (www.xero.com.au), payroll (www.paycycles.com.au), retail POS (www.vendhq.com), workflow (www.workflowmax.com), inventory (www.unleashedsoftware.com), time tracking (www.minutedock.com) and project management (www.bascamphq.com).

The benefits of using these cloud apps include access to “best of breed” software, timely updates, flexibility of using just what you need, lower cost and no need to invest in costly infrastructure. The development of web apps in almost every aspect of business processes will change the way small business people do business. However, the early life stage of these applications still raises a few questions.

However, privacy remains a serious issue for users of accounting and payroll systems. These systems require sensitive third party information be entered into the system. Information such as tax file numbers, ABN and bank account details. Identity theft is a very real risk of living online and these risks must be considered by clients and advisers alike.

Who is liable if your client’s accounting system is hacked and sensitive information is stolen? Is the client responsible? Is the adviser responsible? Should third party persons provide signed consents for their data to be stored online? How detailed would these written consents need to be? Would these written consents limit liability? In the event of loss is your professional indemnity appropriate to cover you for loss from “identity theft”?

The online world and its impact on business cannot be disputed however it is important that clients and advisers consider these risks and seek appropriate legal advice prior to publishing sensitive third party information online.

Cash flow management involves managing the timing of cash in and cash out. In general the objective is to get your cash in before you have to send cash out.

A few tips to managing your Cash-in are following.

What is the key driver to generating Cash-in to your business? That’s right, Sales!

Most retailers are fortunate because they are cash businesses and receive payment at the time of making the sale. But, if you sell goods on account to your customers it is crucial that you minimise the amount of time between the date of the sale and the collection of the money from those sales. Leading credit reporting firm Dun & Bradstreet reports that the average number of days that a customer takes to pay its bills is currently 53.2 days. That is almost 2 months between making the sale and banking YOUR money!! The frightening news is that some businesses are operating with debtor days out to 90 days and beyond. Effective management of your debtors can have the same effect as an additional client or two!! Best practice debtors management commences when you first start working with a new client, not when you find out that you have made a sale and are trying to recover the money from that client. For more on debtors management click here.

Other ways to improve the balance of your bank account include optimising your Inventory on hand and Retiring Assets that don’t add value to your business.  Inventory is crucial to retailers and wholesalers, having the right level on stock to meet your customers demand is the holy grail but if you don’t have the right systems in place it is much more difficult than it sounds. Setting appropriate re-order levels on your accounting software and understanding the time it takes from re-order to delivery will help to ensure that you have just the right amount of stock on hand.

When ordering perishable stock it is critical that you get your stock levels right, I mean throwing out rancid food products is just like throwing money out!!

An absolute No-No is holding on to obsolete stock!! Holding stock that does not sell ties up money on your shelf that would be better in your bank account. Don’t let your ego get in the way, and hold stock with the view that the market will improve. Analyse the probability of this objectively and if it is unlikely that your market will improve, then sell it, even if it is at cost. Remember, it is better in your bank than on the shelves gathering dust!!

Likewise, holding plant and equipment that add no value to your business should be sold and the cash banked or better still invested in assets that add value to the business.

A few tips to managing Cash-out are.

What is the main driver of Cash-out of your business? That’s right Expenses.

The objective when managing suppliers payments is to delay payments for as long as you reasonably can without disturbing the relationship with your supplier. Once again, the plan is to collect money from your customers before you need to pay it to your suppliers. Obviously you cannot do this when it comes to salary and wage payments, superannuation or taxation commitments but where possible you should try to defer payment. For more on manging supplier payments click here.

If you purchase plant & equipment for use in your business another tip is to match the timing of the payments to the timing of the use of that assets.  That is, organise equipment hire purchase or leasing. This will defer payment of cash out of the business over the life of the asset rather than taking a chunk of cash out of the business in one lump sum.

For more on managing cash flow our specialist Newcastle Bookkeepers have the skills to help you make the most out of your cash and ensure that your bookkeeping problems are solved quickly. For a complete list of bookkeeping services contact Shelley on 0412 481 559.

The objective when managing suppliers payments is to delay payments for as long as you reasonably can without disturbing the relationship with your supplier. Once again, the plan is to collect money from your customers before you need to pay it to your suppliers. Obviously you cannot do this when it comes to salary and wage payments, superannuation or taxation commitments but where possible you should try to defer payment.

If you purchase plant & equipment for use in your business another tip is to match the timing of the payments to the timing of the use of that assets.  That is, organise equipment hire purchase or leasing. This will defer payment of cash out of the business over the life of the asset rather than taking a chunk of cash out of the business in one lump sum.

The first sign of business stress will often be evident in the money that a business owes. It may show in delayed payments to creditors, dishonoured payments by the bank, delay in paying staff superannuation and finally increasing taxation debts. If your business is experiencing any of these early warning signs you should act sooner rather than later.

For more on managing payments to suppliers our specialist Newcastle Bookkeepers have the skills to help you make the most out of your cash and ensure that your bookkeeping problems are solved quickly. For a complete list of bookkeeping services contact Shelley on 0412 481 559.

Most retailers are fortunate because they are cash businesses and receive payment at the time of making the sale. But, if you sell goods on account to your cutomers it is crucial that you minimise the amount of time between the date of the sale and the collection of the money from those sales. Leading credit reporting firm Dun & Bradstreet reports that the average number of days that a customer takes to pay its bills is currently 53.2 days. That is almost 2 months between making the sale and banking YOUR money!!

The frightening news is that some businesses are operating with debtor days out to 90 days and beyond. Effective managment of your debtors can in essence have the same impact as an additional client or two!! IF you have annual sales of $1,000,000 and your average days to collect those sales in 90 you will have $246,575 sitting in your clients bank account instead of your bank account. If you reduce these debtor days to 53 the balance will reduce by $101,370 to $145,205 and further if you reduce debtor days to 30 days the balance outstanding will reduce by a further $63,014 to $82,192.

A few crucial steps that you can take to improve your debtors are;

1. Clearly articulate your debtors policy to your client at the time of commencing your relationship. A client that baulks at this stage will most likely be a headache later.

2.  Invoice early and invoice clearly. Find out who the people are that approve payments, if you are working with a large corporate or government department understand their processes and protocols. Ensure your internal processes are effective to collate all the necessary information and ensure that your invoice is clear so your client does not need to come back to you for more information.

3.  Reconcile invoices to workflow periodically and ensure no products or services “slip through the cracks”. Sales teams will be quick to “authorise” write offs, ensure appropraite approvals are sort prior to writing off work.

4.  Review outstanding invoices weekly and commence collection early, make your phone calls, email reminders, reminders by letter … and more phone calls. The rusty gate gets the oil!!  Once again, sales teams will be quick to say “don’t chase” payments but with all due respect ignore them. A sale that you don’t get paid for isn’t really a sale at all!!

5.  Send monthly statements.

For more on managing debtors our specialist Newcastle Bookkeepers have the skills to help you make the most out of your cash and ensure that your bookkeeping problems are solved quickly. For a complete list of bookkeeping services contact Shelley on 0412 481 559.

Newcastle’s very own, Bling Bling Bookkeeping has developed a financial control service for specially developed for retail business owners is the most comprehensive “in-business” financial solution for your industry. The key difference between our financial control service and a standard bookkeeper is that bookkeeping is only one part of our total solution. Our financial control solution includes comprehensive financial reporting and business and strategic planning. With Bling Bling Bookkeeping on your team it is just like having a qualified financial controller on staff to help you get the most out of your business.

At all times our clients know how their business is performing as we maintain a consistent regime of keeping their accounts up to date, monthly reporting and business planning. The real value add for our clients is that we “get right into” the business and understand what the business is all about and how we can make our contribution.

In addition to the standard accounts and payroll functions we provide our clients with detailed analytical support, product/service choice decisions, cash flow management and inventory control. We believe that good financial control goes well beyond entering invoices into an accounting system. Financial control makes sure that those invoices are entered in the right place to start with, and then interpreting that information, assessing and applying it to the business.

Bling Bling Bookkeeping has redefined what business owners should expect from their bookkeeper. Our Financial Control service is focused on working in the business with our clients, we are on hand at all times which takes the pressure off as they know they can call us at any time. Business people should not just settle for a bookkeeper they should demand Financial Control.

Passion is the difference that makes me go the extra mile. Call it commitment, call it what you want, I call it passion. Passion drives me to continually look for better outcomes, either in life or in business, it is the difference when times get tough and I need to dig a little deeper. Passion is a focus that continually drives me not only to do those things that I like to do but also the things that I need to do. The difference between success and failure is often an accumulation of those 1% moments, those little moments that make the difference between a good job and a great job. Passion often makes the difference when it comes to those 1% moments.

In essence my response to my client, was, “I’ll tell you why passion is important to me. I love what I do and I am committed to my clients and passionate about my business. To get the most out of life you need passion, without passion there is no persistence, without persistence there is no performance. Without performance we are all just spectators on the stage of life. I choose not to be a spectator”.

That is why passion is important to me. Why is it important to you?

Once such issue was the power of upselling. Every time I go to a McDonald’s restaurant and order a meal I am always asked the following question, “would you like to up-size that?”. For the record, I generally say no, but think of how many times that question is asked in every McDonalds restaurant across Australia. More to the point think how many people actually say yes and pay the extra $1 or so. How much extra McDonalds earn every day from simply asking “do you want to upsize that?”, $500,000, $1,000,000, $2,000,000? The bottom line is that it really doesn’t matter, what matters is that McDonalds train their staff to up-sell and it works and it makes a lot of money.

Think in terms of how it can work for your retail business. Using the following assumptions, you sell to 700 customers every week and they spend on average $20 per visit. Simply by increasing the Average Customer Sale by $2.00 will result in an increase in weekly sales of $1,400 and an annual increase of $72,800. There are many strategies you may use to increase the Average Customer Sale, such as “spend $22 and get a widget free” or suggestive Selling “special” products which will increase the Average Customer Sale.

But it is not an easy strategy to follow, training your staff to upsell or upsize is not natural to most people and hence may not feel comfortable doing it. It is important to identify the products that you upsell, training staff to “ask the question” and making sure that the products offered are considered valuable and that you don’t harass your customers in the process. Good luck.

Recruitment and managing employee performance are such important roles in business but due to business pressure many small businesses are not able to have a qualified specialist on staff. This task is generally performed by the proprietor, the business manager or the administration coordinator who must dedicate time to recruiting in addition to their regular tasks. The consequences of this laissez-faire type of recruiting can be extremely costly.

As human beings we are pre-programmed with a preference to take the line of least resistance, the easy option. In the case of employee recruitment, it has never been more costly to do this. Dedicating time to recruiting the right person can save you thousands of dollars.

The shortage of available staff has made it difficult to recruit high quality staff. Whilst it is likely that more people will soon become available in the labour market it is important to point out that the talented ones will still be few and far between as employers look to secure them for the challenges ahead.

It is important to commit to having the right people in your business, not only in your business but more importantly in the right position in your business. When recruiting, change your focus to recruit the person who has a specific talent that is relevant to the position you want to fill and has a demonstrated track record of success.

Talent is one of three components that influence an individual’s performance. The other two factors are skills and knowledge. While skills and knowledge are important, talent is generally the X-factor that makes one employee excel in comparison to another employee who has a similar skill and knowledge base.

Talent relates to those abstract skills such as attitude, self motivation, how they cope with stress, how they manage and process information and my personal favourite, how they solve problems. Talent is as unique to a position as it is to an individual. It is important to realise when preparing to recruit for a position that you have a good understanding of what talents will succeed not only in the particular position but also within the environment in which that talent will be used. Equally important is that the candidate can demonstrate a passionate self belief in their skills and a proven track record of producing desired results.

When it come to recruiting and managing talented performers take the following tips on board, take the time to talk to them, invest in them, learn from them and grow with them. This will be a win –win for everyone, for the business, the performer and your team.

Bling Bling  is able to help small business with all their recruitment and performance management needs.

In closing Richard Branson says, “find good people and set them free”.

Some of the reasons why customers make “change decisions” are price, quality, availability of goods and in some circumstances simply due to a clash of personality. Regardless of what you think the reason, don’t get angry. Ask the question, why don’t you want to buy from us anymore?

Take the time to call the customer by phone or personally visit them with the objective of understanding what it was that persuaded them to leave you. There are two factors at play here, 1. What is the customers need? 2. How did they rate you product/service experience?

It may be that the customer’s needs have changed and your product no longer satisfies there need. This decision may be a cause for concern or it may not. If the customer has chosen to pursue a “low cost” strategy yet your products satisfy a “high quality” strategy, it is evident that the two strategies are no longer aligned and you may need to accept that you are unable to meet the customer’s needs. It is important to understand what segment of the market your products satisfy and to ensure that the delivery of those products meet the customer’s needs.

However, if your product strategy and the customer’s strategy are aligned and yet the customer no longer wishes to work with you, you have a problem and you need to  understand why. The best place to start is with those customers who have dumped you! And this leads to the second question, how did they rate your product experience? Don’t let your ego get in the way, ask the question, and seek to understand why your business was unable to meet the customer’s needs. Was the quality acceptable? Was the pricing competitive? Where your staff pleasant to deal with? Don’t be afraid to ask questions that have have “painful” answers for you.

Your objective is to understand how you can do your job better.