January 5, 2016
Best Practices Checklist
Best Practices Checklist
Record keeping
Managing finances
Maintaining cash flow
Purchasing and acquisitions
Record keeping
- Keep and READ accurate, up- to-date records of daily operational activity
- Keep and READ accurate, up-to-date records of AP, AR, Remittances, etc.
- Know your costs on every job
- Create a history of past sales and expenses to help monitor current margins
- Ensure all job costs are accurately reported and processed into AR
- Ensure your remittances are paid regularly to avoid unnecessary penalties
Managing finances
- Create a successful business model with periodic profit goals (quarterly, monthly)
- Have accurate financial statements created every month and UNDERSTAND THEM
- Invest annually in business development, continuing and education (i.e. CLM)
- Consult quarterly with a professional accountant and monthly with a qualified bookkeeper
- Check often your expenses, sales and wages
- Sufficiently reward yourself and your employees
- Have budgets for everything, stick to them, and evaluate regularly
- Ensure you have a great working relationship with bankers, accountant, shareholders, etc.
- Wisely invest revenues to create sustainability and adequately capitalize your company
Maintaining cash flow
- Invoice your customers on time, every time
- Have a computerized consistent and professional template for creating invoices
- Promptly collect outstanding invoices (net 10 days or due on receipt)
- Negotiate the best possible terms with all suppliers, including early booking discounts
- Cash flow doesn’t mean your cash bank balance today — make sure you understand that
- Charge fair and profitable rates for your business
Purchasing and acquisitions
- Carefully research purchases for both value, quality and NECESSITY
- Stage your purchasing over time.
- Don’t borrow money you can’t afford to quickly repay. Remember the slow months
- Borrow as little as possible