Avoiding Speed Bumps In Your Business

Jeff-Pic---current-2010How Financial Oversight Systems save builders and contractors time, energy and money.

by Jeffery K. Prager, Founder, Backroom Management Services LLC.

Hindsight, as they say, is 20/20.  And nowhere is that more true than when using your accounting data to manage what is happening in your business now; today.

The problem is that most of your accounting reports tell you what happened, not what’s happening.  You get a clear picture of the past month or quarter, and you can use that to redirect your company if needed, but there’s too much lag time between the data and the present.  It’s like  slowing down for a speed bump after you’ve already passed it – the bumps and jolts can be brutal.

As the owner or manager of a contracting or homebuilding company, you know the faster you can deal with a problem (see last week’s post on managing exceptions), the more effective your damage control, i.e. the less it costs you and the more profits you make.

That’s where financial oversight systems, such as CASHFLO, extend their value far past standard accounting programs – or even the estimating and scheduling software software you’re likely using – by giving you all your most important reports instantly, dynamically, and in real time.

Let’s take sale goals as an example.  Measuring your sales is easy – you probably know exactly how many sales your team has closed this month – to the minute.  But, how do you manage to ensure you hit your target sales goals?  (“Hope” is not a strategy!)

The two ingredients to hitting sales goals are: 1) Number of new leads, and 2) Conversion rates – two numbers your accounting software doesn’t even track.  So, let’s say it’s the 15th of the month and you have a goal of closing 20 sales for the month.  You should be at 10 sales, right?

But what if your team has only closed 7 new sales?  The problem is either not enough leads or the closing ratio is off.  So, which one is it?  If you wait until the end of the month to find out, there will be no time to fix it!  But if you can see instantly both of those statistics at a glance, within 5 minutes you’ve assessed the problem and are making corrections to get back on track, meet your projections and ensure cash flow.

The reality is that most builders and contractors aren’t watching those numbers at all because somebody has to find the data and generate the reports – and who’s got time for that?  CASHFLO automatically brings your marketing data over from your marketing software (or allows for quick, easy daily entry of the data) and shows you those numbers at a glance in real time on your 7 Numbers Dashboard.  So you get real numbers in time to spot and correct problems before you get to the speed bump.  It also handles all your estimating, job costing, and accounting, and alerts you of any cost overruns early so you can deal with them and keep your profit structure in tact.

At our core, Backroom Management Services is an accounting and bookkeeping firm (the “Services” in our name).  So we understand the power of good accounting – as well as it’s limitations.  We created CASHFLO to fill in those vital management holes to make managing your business and ensuring positive cash flow fast and simple.

Give us a call to see CASHFLO in action by taking a private 10-minute product tour.  It will make your life a whole lot easier, and your business more profitable.  Call 303-221-0823 to schedule your tour today.

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