Do you understand the numbers

Image : http://www.flickr.com

Accounting is a mystery to many people and not as a necessary evil, many entrepreneurs. But the accounts of understanding is a prerequisite for success in business. After all, if not answer the question: "I have not received this month?" So how can you make as CEO of your company? However wonderful your product or service and have good marketing, only a handful of numbers.

It not only numbers. I oftenEntrepreneurs meet to know how many of anything, when, looking closer, the reality is very different (and probably much less optimistic). If you do not know the real numbers, your company may be in trouble, even - perhaps especially - are growing rapidly. growing businesses can use the money to run very quickly if no one checks if the invoices are paid on time!

Here are the basics necessary for you to understand. First, the basics of your bottom lineAccount. Need to know their sales - the quantity sold, direct costs - to buy what you have to sell what you and your administration costs - staff, stationery, marketing, sales, etc., are less direct cost-benefit Gross. Delete this administration and its benefits. This is what gives you the money to take the tent and spend the rest of the day.

You must know these numbers every month, shortly after the monthsends. If you do profit (or loss) if your account or tax refund at the end of the year-end, perhaps too late to change the way you manage your business. In other words, you'll know exactly what you need to know things when it is too late to change something!

In addition to the tax return, the company has to balance. It is a term that represents a snapshot of societyAssets and liabilities at a given time. For small enterprises may not be essential for the daily operation of society, but should be aware of what I have to, who owes what and for how long.

Even - especially - be aware of your cash flow. Other companies not for lack of money than anything else, even if they receive. If you do not pay the rent because you ordered too much inventory, then you're in trouble, what you doProfitability. Be sure to collect cash immediately and respond quickly when customers delay payment.

Next, make sure your number. There is no excuse for neglecting it. buy some of the research on the Internet, a book, go to a course or talk with a tax adviser. Even if you take someone else to give numbers for you, be sure to take some time regularly (once a month) to consider the necessary changes in costs or procedures. Can not be achievedpossession of a business without understanding the same numbers.