EzyAccounts bookkeepers work with local business owners from a huge range of industries.
While the details differ according to each business’s unique situation and needs, the services we provide are always designed to achieve two key outcomes: improving your efficiency and increasing your profits.
Below is a real world bookkeeping story from one of our bookkeepers, who worked with a local construction company where the bookkeeping had fallen seriously behind. This case study illustrates the sorts of problems our bookkeepers help to solve on a daily basis, and the sorts of results you can expect to see when you engage EzyAccounts to help manage your business’s books.
When our bookkeeper came to “John Smith Construction” (yep, you guessed it – that’s not their actual name), they found a business that had been growing every year.
However, due to personal circumstances, the owner had not been able to keep on top of the business books. As a result, the books were behind and incomplete.
This led to the following problems:
- Months of unreconciled accounts
- Missed lodgement dates with the ATO
- No knowledge of the business’s financial position (because there were no accurate financial reports to provide this knowledge)
- Cash flow pressures due to increased expenses
The Initial Solution
The first job our bookkeeper tackled was to bring the books up-to-date, and to lodge missed statements with the ATO. This involved trawling through transactions and clearing up bank reconciliations for several months.
When your books have gotten behind, this can be a time-consuming task to say the least. So as soon as it was done, our bookkeeper also introduced automatic accounting systems for John Smith Construction. Not only were the books now up-to-date, they would also be much more efficient and easier to manage in the future. Win-win.
Smoothing out Cash Flow
As we mentioned, cash flow pressures were one of the key problems John Smith Construction faced. So our bookkeeper’s next task was to introduce monthly cash flow forecasting. This involved analysing the business’s expenses and revenue, as well as projected completion and payment dates for different projects, and creating forecasts based on this data.
Having identified that time taken to receive payments was another area that required improvement, our bookkeeper also helped John Smith Construction to implement continual monitoring and process improvement for debtors aging. As a result, average debtors aging quickly improved by over 70%.
Together, these two measures have helped John Smith Construction to better manage their cash flow and avoid cash flow shortages.
Our bookkeeper used several strategies and approaches to help improve John Smith Construction’s profits. One notable example is project budgeting, with weekly variance analyses.
Project budgeting combined with variance analyses is an effective cost control measure, as it helps to ensure that costs don’t grow beyond what they’re predicted to be. A key part of this is the weekly variance analysis. This allowed John Smith Construction to get early warning of any costs that weren’t meeting predictions. That way, any unnecessary costs could be addressed before they got out of hand and began to eat into their profits.
By helping to control spending on each project, this measure helped to increase the company’s profits.
Are your business books behind? Is your cash flow a little tight? Do you know what your business’s financial position really is?
These are just a handful of the areas where EzyAccounts can help.
To learn more about the services we can offer you, call us today on 1300 313 397