Being Profit Focused
Welcome, welcome. Today we’re turning how you think about what you do for your clients upside down – or at least a little sideways.
Tell me if this sounds familiar….
You spend the first one or two weeks of the month sifting through all the data, making sure that all the transactions are recorded and coded to the right places and putting great effort into the accuracy of the basic financials. Somewhere in there are bank and credit card reconciliations, sales tax and payroll.
Except that a BIG piece is missing.
When you get hyper-focused on the transactional side – the bank recs, the entries for every last thing – you can miss the bigger picture. You can miss the opportunity to understand and translate the information in a meaningful and timely way to your clients because you are too buried in the numbers.
It’s time for a more holistic profit-focused approach that doesn’t add a ton of work to your plate but does give your clients the insights into their results that they are craving.
Funny enough - Your clients may not even know they are missing it specifically. But here’s what that can sound like in their comments…
I’d like to hire another person for fill-in-blank but I am not sure we can afford it.
I wish we knew what was really making us money
Why do we seem to start off the month so strong but are struggling to pay the bills by the end of the month?
Do you think we’ll ever get past this cash flow roller coaster?
Why are our sales so great but we are always scrambling to make payroll or pay the credit card?
If you have only been focused on monthly resulting reporting, this is going to be one of the biggest shifts you will make. It is less about crunching numbers and more about analyzing them for trends and signals. It is less about compliance and more about communication.
You want your work to be adding value and propelling your client’s businesses forward and that’s what being profit-focused will help you do.
Imagine a little here with me….
What if your monthly work focused first on getting 90% of the information compiled and analyzed around profitability? What if you could tell your clients within 3 days of month-end what the key financial results were going to be – and what things needed to be adjusted (or not) for the new month?
This isn’t about completely overhauling your month-end process – it’s about reorganizing it so you are providing more value to your clients.
It’s also about helping them get focused on what will give them a business that is less roller coaster and more smooth gondola ride.
And the best news? You are in control of the analysis. You can start getting better information to your clients FAST. You can be the person who starts adding value without asking permission because you already have all that you need to do this.
The biggest shift will be in how YOU think about and approach processing and analyzing the information and data.
One of the things I did on a long-term client was to start producing a “Revenue Flash” report as soon as all the customer invoicing was complete. Getting the customers invoiced and revenue recorded became the first thing that got done in month-end close. The second thing was then the Revenue Flash report. That didn’t mean that revenue might not change a little, but it was close enough to provide the insights needed to validate how they thought the month had gone.
Here’s why that was important for this client: they had judged where revenue was going to be based on “how busy it felt” in the business on a day to day basis. I am not kidding even a little bit. By getting the revenue data to them as fast as possible (and not on the 15th of the month), they were able to look at what was actually happening and not on how things felt.
Reporting on revenue in this way was our first step towards moving into a profit focus – and it provided a good framework for new communication as well as setting the foundation of the profit focus to come. I know that revenue can provide false echoes at times, but it is also a really easy thing for your clients to understand. It can be an easy win for both of you – and who doesn’t like easy win-wins?!
That’s just one example of how you can start taking immediate action – head on over to powerofprofitability.com to get even more resources.
Talk soon!
How can you use this example with your clients (or maybe in your own business)? Grab our Profit Leaks checklist below. It’s free and will get you into action immediately.
