Small Business Benefits Of Benchmarking In Accounting

One of the most beneficial comparisons businesses of all types use is benchmarking. Benchmarking can better help a company gauge their success and find areas they need to put more focus on. The process analyzes the various metrics of a business and compares and contrasts them to other industry standards. Using benchmarking can help companies become more competitive in their market. For small companies this is a highly useful way to help position themselves as a contender against larger or corporate companies.

Five Benefits Of Benchmarking:

There are a number of reasons smaller businesses should use benchmarking. Some of these key factors include:

1 – Benchmarking allows a company to discover why other businesses in your industry are successful. By comparing the practices your business has in place to the successful practices of industry leaders. In this way, you can better create a more effective and profitable system, in your company. Just by using these industry comparisons. The benchmarking formula allows you to copy the best. And the results profitable in our super competitive world of business.

2 – Through benchmarking you can know exactly where you can cut costs. Also comparing where other businesses are importing products from or who they outsource jobs to. These benchmark factors can help you determine if you should consider these options as well. This can save small businesses a good amount of money in the short. Especially with labor costs and lower costs of mistakes. This fact alone is a huge advantage to the company with a tight profit margin. And with little room for guess-work.

3 – Your business performance level can be accurately calculated. Benchmarking will give you a look at how your profits and expenses compare to other industry leaders. Through a wide range of data you will be able to see exactly where your firm is falling short compared to other companies. This allows you to be able to pinpoint exactly what needs to be re-worked to increase productivity and efficiency. There’s more.

4 – You can also use benchmarking internally to compare the performance of the different departments in your small business. Comparing the departments in your own company can help you improve performances throughout the company. But, your top performing department should first be benchmarked against other leading company departments. As a result, you will glean an accurate measure to base your origin of performance from. As well as check your comparison after your new changes are implemented.

5 – If you want to improve the quality of your products or services benchmarking can help determine how other businesses products or services are outperforming your own. Various elements, parts and technologies can be compared to show you where you will want to make improvements with your product or service to stay competitive with the industry leaders.

In conclusion, benchmarking in small business accounting is a highly efficient way for you to see how your small business compares to other industry leaders. You can benefit from better quality of products or services, improve performances and restructure your small business to cut cost and run more efficiently. Utilizing benchmarking can help struggling small businesses see why they’re struggling and can help established business stay competitive in an overcrowded market.

Characteristics Of A Genuine Business Owner

We see it too many times: a business owner who is just after your money or is just looking to make a sale. It’s a sad reality in the world that there are owners out there who know how to play the game and how to make a fool out of customers. The purpose of this article is to help people understand the qualities that a genuine business owner should have and what people should look out for.

#1: A Business Owner Should Always Be Willing to Admit Imperfections And Fault

Imperfections are always going to be a part of our lives, both personally and professionally. I’m sure all of you have seen various guarantees or promises by businesses for a top result in a short period of time. A genuine owner is the kind that will admit that their product is not perfect and that it is a work in progress. A business owner should, of course, stand by the effectiveness of their products and services, but he or she must not be afraid to admit imperfections about their products/services, and their business.

#2: A Business Owner Must Be Available And Willing To Answer Many Questions About Their Products, Services, and Criticisms

If there’s one key trait an owner must possess in order to be successful, it is a willingness to answer questions. Prospective clients will always have questions about products and services. It is the responsibility of the owner to be able to answer those questions effectively without evading them. If they do not know the answer, they need to communicate that openly to the client and research the answer to give to the client at a later time.

Any business owner who tries to evade questions or is unwilling to answer questions should be a dead giveaway that the owner is not genuine. Enduring questions and criticism is a key part of success in a business. Those questions and critcisms can provide an opportunity for the owner to improve their business if they make the best use of such opportunities.

#3: A Business Owner Should Be More Concerned About Learning About The Customer, As Opposed To Making A Sale

This is a tough one because every business is different, and some depend on the sale more than other businesses such as car salespeople and sales positions at various companies. My educational background has taught me that it is better to focus on the customer and their goals and needs as opposed to getting them to buy a product. I feel this makes the owner more genuine because they really learn about the customer and can better assist the customer in getting them the right product and service. It is also just as important to let the consumer decide on their own time whether they should buy the product or service as opposed to badgering them on the spot to purchase it.

Again, all businesses are different and some depend on making sales more than others. However, it is my personal belief that a business owner who spends time learning about the customer and letting them make their own decision on their own time comes across as a more genuine owner because the owner has placed the decision in the consumer’s hands, where it should have been from the very start.

Small Business Accounting Tips to Help Maximize Profits

You may be paying attention to the revenue coming in and the invoices that need to be paid out. However, especially for small business and start-up businesses, there is a lot of cash flow that does not get properly recorded. Your business finances should be kept in careful records. This makes it easy for you to not only see where the money is coming from, and going to. Most important, this will also make tax time much less stressful. Small businesses should utilize these simple accounting tips that will keep their business finances in order and up to date very efficiently.

Accounting Tips For Small Businesses:

1.) It’s common for many small business people to have their personal expenses blended with their business expenses, but these two should always be kept separated. Set up specific accounts just for your business from bank accounts to credit cards. This will save you a lot of time and stress during tax season guaranteed.

2.) Get all your expenses carefully organized. Paying with a business credit card for most purchases will make tracking your expenses easier and will cut back on the paper receipts you need to file. If you do need to use cash for any purchase be sure to get the receipts and file them digitally. This way you keep everything organized and in one location.

3.) Revenue is also one area you want to carefully organize. Make sure you know where all your cash coming into your business is coming from and keep accurate records. Not doing so could cause you to pay more in income taxes than necessary.

4.) You should have a dedicated day each week for updating your books. Keeping accurate and updated books is the best way to stay organized and on top of your business finances.

5.) Keep accurate records of your merchandise as well. You want to keep track of when you restocked, how much merchandise you have on hand. And how much you sold. This can easily reveal where merchandise may be misplaced, lost or even stolen.

6.) Make sure you follow-up on invoices and accounts receivable. With the many other aspects you have to focus on in your business it can be easy to forget or let go some unpaid invoices for long periods of time, but these can cost you in time and money. Make sure you send reminders or call about payments still owed to you.

7.) Small business should always hire a professional accountant to help with their financial organization. The accounting area of your business can be a complicated area to understand and you want to make sure you are not missing information. And that you are calculating the right taxes. An accountant can easily show you where you can benefit from tax deductions, keep your records up to date and help you understand your businesses finances better.

Small business owners should pay special attention to their finances. This is especially important in the first year of operations. With these tips you can better keep your business finances organized and up to date.