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Bookkeeping Case Studies

Case 1 - cashflow disaster


Cashflow Disaster

Ever had this happening to you in your business? :

Orders coming in, Sales increasing, feeling elated and that the business is finally taking off to bring some profits in. In fact all the hard work you put in now reaps its rewards and you are soo busy, that you just plain forget about the bookkeeping. The account is looking better than before, with money coming in, so you can actually pay all the bills now and even a little left for yourself. Tax time is still a long way off and as you are not GST registered, there are no BAS Statements looming either. So why bother, it can be done later. Or can it? "I am just too busy. I need to concentrate on getting the jobs done" - Is this you?

One of my clients - a very busy Graphic Designer, working from home - was just in that situation.Her husband helped her doing the books on an Excelspread sheet, when he found the time, being busy working full time himself. The first action we took with her business was setting up a bookkeeping system for her, as one of her big issues was the invoicing and she needed to be more in control of the invoices and outstanding payments. Looking at the different options she decided to go with the MYOB AccountRightPlus. Discussing in depths how detailed she would like to have her tracking of profits and costs as she was doing graphic design, printing but also general artwork besides the website work so we separated these areas into different accounts. Then we itemised the jobs she does, so that an invoice was being issued faster with less typing. Her decision was that she wanted to have the full financial year on the MYOB file, which meant we had to go back 6 months and data entry this. It was a worthwhile decision. Doing so I found that she paid all the expenses with her credit card,which then got paid off in full, but the invoices for those jobs got out months later! In one instance I actually found for her several invoices she had plain right forgotten to issue to the clients to the value of almost $5000. Having done the financial year and seeing where the flaws where, the next step was setting up the reminders in the MYOB program for the recurring invoices - to be invoiced in advance of the period of webhosting etc. We spoke about how to get her business working more efficient and solved the invoice raising issue with a simple exercise book, where she notes down the jobs, when they got done and the details according to the standard items list we have plus two columns where it then was noted when the invoice was issued and when it was send. I come once a week and raise the invoices in MYOB plus also data entry the bills for her. Most of the time the husband does the invoicing now as it is easy with the new established inventory list. Her accounts look a lot healthier and the Cashflow is finally going into her direction! Our next step is now to look at her job costing, which is now as easy as pressing one button. The other plus point of the improved Cashflow is that she was able to increase her repayments to her business loan, helping her reduce the interest expense.

It brought me extreme job satisfaction to have been able to do this for her. Being passionate about empowering my clients more in their finances, this was exactly what I have been able to achieve for her. If you are in a similar situation, give me a call. I am sure we can help you improve your situation.