Many of us who run a managed services business are primarily technicians by nature. We love fixing issues, helping clients, and learning new technologies.
Before we know it, we need to be more than just technicians though. We also need to run a business where it’s not enough to simply do the client work. There are dozens of other balls to juggle too!
How is your company doing financially?
None of these “balls” is more important than the financial well-being of the company. If your business runs out of money, there is no business—and you’re unable to help clients.
Yet many IT business owners I speak to have no real clue about the state of their business finances. When pressed, they share that an accountant or bookkeeper looks after everything for them.
While it’s a great idea to have a fully trained financial expert managing the books, it’s ultimately the business owner’s responsibility for ensuring the finances of his or her business are in good condition.
This is where a weekly financial report can become useful.
Keep an eye on financial KPIs
A weekly financial report is a quick and simple way to review where your business stands on a few key performance indicators (KPIs).
Your weekly financial report might include dollar amounts for:
- Cash your business has in its bank account(s)
- Bills currently owed by your business to suppliers
- Amount needed to pay tax bills when they come due
- Client invoices currently outstanding
- Client invoices overdue
These at-a-glance figures help you as the business owner (and any other directors or stakeholders in the business) keep a constant eye on the financial status of your business and allow you to correct course accordingly.
For instance, if the total amount of overdue client invoices is increasing week over week, you can take steps to reclaim the money owed.
Delegate the task of creating a financial report…
For most business owners, it’s easiest to speak to your accountant or bookkeeper and ask them to produce and send you a weekly financial report on a specific day of each week.
By making the report day consistent, you’ll start to build a habit of quickly reviewing the numbers and acting upon any information that needs your attention.
Most accounting packages such as Sage, QuickBooks, or Kashflow can quickly and easily produce a financial report. But it’s important that it’s not the business owner’s responsibility to produce the report.
If you take the responsibility, you’ll more often than not let other things get in the way. This is your technician asserting itself over the business owner again.
So ensure you delegate responsibility for generating the report to your accountant or bookkeeper, even if it’s just a 30-second task. That way it’s much more likely to be produced consistently..
…But review the report yourself
For many IT business owners, the focus is squarely upon serving clients and earning money.
But if you don’t pay attention to the finances on a week-to-week basis, you’ll pay the price through debts that can never be recovered, bills you can’t afford to pay, and an overall inability to adjust the course of your business as you go.
Resist the urge to abdicate financial responsibility for your business. Reviewing a weekly financial report keeps your finger on the pulse of your company.