1. 1. FINANCIAL CONTROL IN YOUR BUSINESS Know What Makes You Money Know What Takes Your Money
2. 2. DASHBOARDS A great business tool for small and medium businesses
3. 3. WHY ARE BUSINESS PERFORMANCE REPORTS IMPORTANT? Diagnosis Relevant information gathering Breakdown of information Cure There is not one fix Design and implement corrective actions Prevention Use an on going monitoring regime
4. 4. BUSINESS OWNERS CONCERNS Business owners have areas of concern. Some common ones are: 1. Lack of bottom line profit 2. Cash shortages 3. Identifying and reducing costs 4. Growing revenue 5. Growing the business
5. 5. IF YOU CANNOT MEASURE IT, YOU CANNOT MANAGE IT How visible is your business performance? Over 51% of owners do not review their businesses performance Why? What are the most common reasons? 1. Do not have time 2. Do not understand the business reports 3. My business seems to be tracking ok , why bother? 4. My accountant looks after the business reports
6. 6. Is this your end of month ? Do you have multiple sources of data to try and understand?
7. 7. A snapshot of a business cost report. Very difficult to understand
8. 8. M ar 14 Apr 14 Ordinary Incom e /Expe ns e Incom e Govt Subs idy 2,500.00 2,500.00 Sale s (Sale s ) CNC 29,110.05 29,110.05 Engine e ring 27,877.56 27,877.56 Pum ps 30.00 30.00 Total Sale s (Sale s ) 57,017.61 57,017.61 Total Incom e 59,517.61 59,517.61 Cos t of Goods Sold Cons um able s CNC 3.59 3.59 Engine e ring 24.02 24.02 Gas 320.00 320.00 Cons um able s - Othe r 9,607.32 9,607.32 Total Cons um able s 9,954.93 9,954.93 Fre ight & Handling Fe e s 1,036.40 1,036.40 M ate rials 32,880.48 32,880.48 Othe r M anufacturing Se rvice s CNC 1,836.00 1,836.00 Othe r M anufacturing Se rvice s - Othe r 4,245.94 4,245.94 Total Othe r M anufacturing Se rvice s 6,081.94 6,081.94 Wage s CNC 20,041.58 20,041.58 Engine e ring 26,745.00 26,745.00 Work s hop 5,944.08 5,944.08 Total Wage s 52,730.66 52,730.66 Total COGS 102,684.41 102,684.41 Gros s Profit -43,166.80 -43,166.80 Expe ns e Accounting Fe e s 555.00 555.00 Adve rtis ing 377.90 377.90 Com pute r / Office Expe ns e s 205.17 205.17 Cons ultancy 1,866.20 1,866.20 De pre ciation CNC 8,747.58 8,747.58 Eng 4,194.49 4,194.49 De pre ciation - Othe r 937.08 937.08 Total De pre ciation 13,879.15 13,879.15 Donation 48.00 48.00 Ele ctricity 3,109.02 3,109.02 Fre ight & Courie r Fe e s 155.30 155.30 Govt. charge s (bad tax, s tam p duty, e tc e tc) 0.10 0.10 Ins urance s 1,738.35 1,738.35 Inte rne t 111.52 111.52 Le as e / HP - CNC HAAS 5th axis + HAAS table 306.15 306.15 Ok um a LB300M C-SSB 397.82 397.82 Ok um a M ill M M 56VA-S15 683.07 683.07 Total Le as e / HP - CNC 1,387.04 1,387.04 Le as e / HP - M otor Ve hicle s Am arok 120.62 120.62 M ultivan 145.68 145.68 Total Le as e / HP - M otor Ve hicle s 266.30 266.30 Le as e / HP - Office Equipm e nt SBS Se rve r Sys te m 119.22 119.22 Total Le as e / HP - Office Equipm e nt 119.22 119.22 M agazine s & Subs criptions 5,430.00 5,430.00 M otor Ve hicle Expe ns e s Fue l & Park ing 1,107.72 1,107.72 Re gis tration & Ins urance 193.30 193.30 Every month same spreadsheet. Boring and difficult to read.
9. 9. Costs do not exist to be calculated. Costs exist to be reduced Taiichi Ohno
10. 10. DEMO DASHBOARD
11. 11. USING THE DASHBOARD By using the information from the dashboard functions, corrective actions can be applied to the business Targeted cost reduction programs Marketing & sales initiatives Supplier pricing performance Customer activity Stock turnover
12. 12. SOME COST EXAMPLES High labour costs to sales in particular overtime Slow moving stock items High general business costs /fixed expenses Low gross profit and contributing factors Compare actual to budget performance Reduced sales, are customers dropping off?
13. 13. PREVENTION Monitor your business Regularly use the information displayed Act on findings Review outcomes
14. 14. DASHBOARD CONCLUSION Converts data into valuable information Easy to read Simple visual graphics Filter capabilities Great for report generation Saves businesses money If its data it can be made into a dashboard
15. 15. THANK YOU Gary Willis www.red49.com.au