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Use Return on Investment (ROI) for effective project analysis
For small businesses in all industries, measuring the Return on Investment (ROI) for every major expense should be a mandatory exercise. Unfortunately, calculating this financial metric is often overlooked, so owners and managers miss out on the accompanying benefits....
Learn to read your cash flow statement
Small business owners have a lot of tasks to manage to keep their businesses running smoothly, but among the most important things on the radar is the financial health of the enterprise. Everyone knows when the money dries up, you’re done. Though there are many pieces...
Beware! Profit does not equal cash flow
Small businesses are especially susceptible to fluctuations in cash flow, so owners andmanagers need to continually monitor their company’s cash balance. As we’ve outlinedpreviously, the cash balance report is a great way to that. Beyond the cash balance report,...
Look at your cash balance report daily
Cash is king, and that is especially true for small businesses. As an owner or manager, you mustkeep an eagle eye on cash balances to ensure the financial stability of your company. You don’twant to be caught in a situation where it’s Monday, cash reserves are low,...
Creating a budget using financial reports
In our last article, we highlighted three ways to analyze financial reports. As we discussed,documents including the income statement and key performance indicators (KPIs) such ascurrent ratio and quick ratio can give you valuable insight into what’s going on in...
3 ways you should be analyzing financial reports
Small business owners must pay close attention to financial reports, because they give essential insights into the financial health and performance of the business. Correctly analyzing the balance sheet, income statement, and cash flow statement will yield invaluable...
Correctly interpreting your Labor Efficiency Ratio can pay big
In the last article, we introduced a key metric called the Labor Efficiency Ratio (LER). Basically, the LER measured how much a unit of revenue costs to produce. We’d encourage you to go back and read the previous article if you haven’t already. The higher the LER,...
Track your Labor Efficiency Ratio to spend salary dollars more efficiently
Gain insight into a big expense from this simple metric For most small companies, labor is the biggest expense. So as a business owner or manager, you need to keep a close eye on the relationship between the money spent on employees and contractors and the resulting...
3 tips to improve your Accounts Payable
Examining A/P is very important right now as credit starts to freeze Cash is always king when it comes to the accounting of your small business, but especially right now. Nearly daily the headlines are filled with concerns about credit seizing up for smaller companies...
Lessons for your small business from the recent bank failures
Don’t be passive about your accounts over $250K The collapse of Silicon Valley Bank (SVB), followed closely by Signature Bank, earlier this month has a lot of small businesses and startups doing some self-reflecting on the way they manage their finances. Many...
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