Concierge CPA February 2018

Concierge CPA February 2018

February 2018

8221 Brecksville Rd, STE 205 Brecksville, OH 44141

[email protected]

(440) 340-1030

Conciergecpas.com

Do You Really Know Your Numbers

or Are You Kidding Yourself?

If you are a client of Concierge CPAs, or if you have followed us for any length of time, you know how big we are on knowing your numbers, as well as understanding the story the numbers tell you about the business. Recently, we conducted a VIP strategy day with a law firm at their office. Laz and I had not worked with this firmbefore, and we were excited for the opportunity to get to know thembetter. The goal was to figure out the owner’s blind spots and to help him formulate a strategy to grow his practice. It wasn’t an easy mission, considering he was already successful. And from the outside, the business looked like a well-oiled machine. Their bookkeeper and office manager joined us for the day. It became evident that the numbers the firmowner threw around in our conversations were different than what was reported by the bookkeeper and office manager. This example remindedme of how different measured reality can be compared to howwe feel things are going in our business. It is hard to overemphasize the importance of measuring and tracking your key performance indicators. Howdo you get a clear picture of the state of your business? There are different numbers in your firm that you need to examine on a daily, weekly, andmonthly basis. DAILY We recommend you get a simple email report each day with the following information:

These two pieces of information let you keep a pulse on one of the most important factors—cash. Even if you are physically away from the business, this simple email (without any attachments) will either put you at ease or alert you to do something about a negative situation. WEEKLY Each week, you should be presented with the following reports:

1. Two-week cash projection, showing expected deposits and bill payments.

2. Weekly sales and productivity report with this information: a. Number of new files opened and closed in each department. b. Total number of open cases.

c. Billable hours per staffmember. d. Accounts receivable aging report.

If the projected bank balance drops below a certain figure on the cash- flow projection report, it should trigger either acceleration of collections or postponement of bill payments. Looking at the billable hours generated each week will show you who needs to up their game, and it gives you the opportunity to do something about it before a staffmember gets way behind their billable goals. The A/R report alerts you to reach out to clients who owe you before it becomes too late to collect. MONTHLY At least once a month, metrics and key numbers of the firm should be presented in a clean and easy-to-digest format. Think about a more condensed version of your income statement that shows the current monthly and year-to-date figures, both actual and forecasted, and the variance between the two.

The income section should list all revenue streams separately. The expenses should be summarized in labor, facilities, marketing, client expenses, and other.

1. Cash balance of the business’bank accounts.

2. A list of the client payments received and deposited that day.

Some of the other non-financial >Page 1 Page 2 Page 3 Page 4

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