Wednesday, 25 Jul 2018
Every business owner understands the importance of maintaining accurate financial records. Good bookkeeping is one of the keys to managing your finances efficiently, and it can also help with things like paying your taxes, securing a loan, and tracking the performance of your company.
While most business owners are aware of the apparent benefits of bookkeeping, what they might not realise is that accurate financial records can also provide insights to increase sales and profitability. Here are the ten ways in which good bookkeeping helps to generate more sales:
Bookkeeping is a time-consuming process, and it is something that needs to be continually maintained. With the services of a skilled bookkeeper in Melbourne, you can remove this element of business management from your workload. This will free up more time for you to focus on the core operations of your business and give you more time to work on the tasks that drive sales.
2. Identify Your Top Performers
When you have accurate books, you will be in a better position to identify the products or services that are most popular with your customers. The first benefit to this is that you can better track sales and inventory to maintain stock without over-purchasing. Additionally, it will also allow you to develop strategies around the products and services that perform the best.
3. Recognise the Losers
There are many reasons that a product might be a ‘loser’. It could be a product that does not sell well or it could be a product that sells but doesn’t offer enough of a profit margin. Either way these are the products you might want to consider removing from your inventory, and accurate records will help you to guide these decisions.
4. Customer Spending Patterns
Good bookkeeping can provide insights into customer behaviour and spending patterns. People have different shopping patterns at different times of the year or in response to different circumstances.
An example of this may be spending either just before tax time when people are looking for assets to claim or just after when they are spending their tax return. When you can identify the shift in spending patterns that result from different events and circumstances, you can plan ahead to take advantage of these changes.
5. Finding Your Best Customers
Your best customers have a value that extends beyond their simple contribution to your profit margins. A good customer is someone who comes back to spend. In addition to that, they might even be willing to advocate for your brand. When you know who your best customers are, you could ask for referrals. You may even want to extend rewards to your customers that participate in your referrals program.
6. Accurate Invoicing
Accurate invoicing can be an important part of customer relations. Inaccurate invoices are an inconvenience to customers. It means that they must contact you to get the matter sorted out, and if it happens more than once, it can have an impact on your reputation. Customers won’t feel confident doing business with a company that has problems with maintaining accurate records or sending accurate invoices.
7. Finding Opportunities
Your financial records can be used to forecast growth and to identify new opportunities for growth. When you see these opportunities ahead of time, it puts you in a better position to plan for them. If you don’t see opportunities for growth coming, they might pass you by.
8. Seeing Problems Before They Occur
Along with spotting opportunities, bookkeeping can also help a business identify potential problems before they occur. It could be something like a shortfall in inventory that always occurs at a certain time of the year or in response to a specific type of event. When you notice these trends in your books, you can see these issues coming and prepare for them.
9. New Marketing Insights
When you have accurate financial records, you can analyse your books to find new marketing insights. You might find different purchasing behaviours that are associated with people in different groups, or you might find that people with certain attributes are more likely to buy a specific product. You can then apply these insights to social media marketing or email marketing to send relevant advertising content to targeted groups of customers.
10. Efficient Pricing
A well-informed pricing strategy can have a significant impact on sales and profitability. With good bookkeeping, you can analyse your prices, compare them to competitors and make decisions that could help to drive growth.
You might find that lowering the price of one product could draw in more customers that will spend more on other items. You may also find that you have room to charge a little more for a product or service or that some of your offerings are slightly overpriced. When you have the data, you can make pricing decisions that will serve your company well.
Thus effective bookkeeping helps to identify what works for a business and what isn’t good for it. Further, it provides information about the opportunities that can be leveraged to grab a substantial market share in the future. Consequently, it works towards making the business sustainable and more profitable through the aspects mentioned above.
We are a family run bookkeeping business that has grown to include offices around Australia in Melbourne, Adelaide, Brisbane, Sydney and Canberra. We have been helping our clients grow since 2001. Being one of the leading Bookkeepers in Melbourne, we are offering free consultation to every new client.
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Suite 20, Level 4 161 London Circuit, Canberra City.2601(02) 6152 91 16
605-609/118 King William
Street,Adelaide, SA 5000
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