Four Areas Where Spending More Pays Off

It’s generally overheada good idea to keep overhead costs low so that your business profits will be higher.  This is especially true with items that are fairly standardized, such as utilities and rent.  But there are times when increasing expenses pays yields nice dividends
like investments. Here are four areas to consider so you can reap the rewards.

Training    

Whether it’s for you or your staff, good training can pay back for years to come. Having untrained staff, whether office or field, impacts 

  • Getting work done on time (slow can be costly)
  • Getting it done well or correctly, (incorrectly can be expensive) and 
  • Your reputation. You definitely don’t want that to suffer!!

While QuickBooks is user-friendly, I’ve lost count of the mistakes I made in the past as well as those I see my clients make.  When I do my assessments, I cover a wide range of areas and it gives me a good idea of just how much (or how little), those using QuickBooks know.  And then we can tailor training that addresses both the “how-to” as well as ways to get work done more efficiently.

You might get training to increase your skill in your profession.  I know many of you need to maintain certifications; that provides both opportunities and impetus for training.  Not only do you learn new “tricks or tools” of the trade, but it provides another benefit when marketing your business – especially if you are compared to those without your credentials.

Sometimes that training includes helping to run your business, such as general business skills, new technology, marketing, finance, and leadership.  And just about everyone can benefit from learning more about project management, communications, and negotiations, to name a few more.  

Tools

For many of you, that’s the tools and equipment while out in the field as well as the tools in the office. Old or cheap equipment often affects how quickly work gets done as well as your maintenance costs. The last thing you want is to have to postpone work because you don’t have working equipment!  I know some companies lease lots of their equipment so they can easily get replacements when something stops working and they can easily upgrade to a newer/better model.

In the office (and for some field staff), it’s a great idea to provide your employees with the most powerful computers and software on the market.  The cost of labor outweighs the costs of the computers, so it makes sense to load employees up with the best tools you can.  An employee with a slow computer, through no fault of their own, is not giving you their best, and that will cost money in lost productivity.  One of the reasons they went to larger monitors and dual monitors was they found the cost of an employee having to scroll or wait for something to load affected productivity.  While it may seem small, multiplied over the day/week/year and then number of employees, it definitely adds up.  Ten minutes a day is almost an hour a week. 

Personally, because I know I’m going to load new software every year that won’t care about the age of my computer, I get plenty of RAM and go with a faster computer (not the top, but definitely above the middle).  If you’re the owner, you can spend your time fighting with a machine or getting a ton of work done.  I’m pretty sure the latter is more profitable.     

Software

With software, there are two areas to consider: your existing software and software that solves for a pain point.  

In the case of existing software, I often see businesses fighting upgrading software, such as their QuickBooks. I always recommend looking at what the new version offers.  If there are features that help you get your work done faster or being able to do something you’ve wanted for years, it usually makes sense to upgrade so you and your staff can get work done more easily.

In the case of software that solves for a pain point, you have to ask what’s the cost of doing it the “long, slow” way compared to the new way.  While you may not need software with all the bells and whistles, you may find that some version will streamline your workflow, which will save you money in the long-run.  It may even help you make more money because you can get more done!  Some examples include estimating software, CRM (lead and opportunity tracking), time tracking, inventory, reporting, etc.  

Your Books

Successful companies invest in accounting technology, accurate bookkeeping, thorough reporting, tax minimization, and professional consulting.  When business owners cut corners in any of these areas, it usually costs them more money in the long run to clean up the problems that result.   I certainly see this with users who set up poorly (because they didn’t know better).  Sometimes that means inaccurate job cost reports and/or inaccurate financial statements which impacts your analysis and decision-making.  Inaccurate financial statements can also affect how much you can (or can’t) borrow from banks.

Making sure the bookkeeping and reconciliations are done properly is not only essential for compliance reporting (such as payroll and income taxes) but also for the job costing and financial reports you review.  While downloading bank transactions can definitely make reconciling bank and credit card statements much easier, it does NOT replace actually reconciling your account(s).  Sometimes transactions are in twice or checks aren’t cashed, or the right amount but wrong transaction was “matched” so it’s always a good check on what’s going on in those accounts. Reports easily accessible (several of mine are just 1 click away on my QuickBooks toolbar) help business owners make smart decisions about running their business, and minimizing taxes. And that, helps you keep more of what you make.  

Just like your eyes pick up information about job sites that may not be so obvious to a homeowner, good accountants have developed an eye for opportunities that a business owner may not see or alert you to impending financial issues (especially if you ignore your company’s Balance Sheet).  Because I’m in QuickBooks all the time and work with contractors, I can quickly pick up on possible issues that may impact financials or issues that mays show the data file is at risk for technical problems.

Measuring the Payoff

Industry-specific apps often have metrics which help you gauge how your jobs are going; some apps even compare your business to industry benchmark standards.  Professional consultants in your industry can often quickly identify strengths and/or weaknesses in your business – whether it’s in your financials, leadership, or operations. Your accountant can help you measure return on investments in many of these areas. If it involves QuickBooks, we can help in a variety of ways – obtain a version of QuickBooks that suits your needs, customize settings and features to fit your business better, train staff to use it correctly and effectively, streamline your QuickBooks workflow, set up custom reports and more – just ask!  

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