Here I discussed one part of the problem and how to structure your project cash flow and payment schedules.
Let me know if I need to produce more such videos on project pricing and profitability.
Accounts Receivable is the total amount of money owed to a company by debtors for buying goods or services on credit. This amount reflects in the balance sheet as current asset.
Generally due amounts of the invoices that you gave to your customers will fall under this category.
Accounts Payable is the total amount of money a business owes to creditors for buying goods or services on credit. This amount reflects in the balance sheet as current liability.
Generally all the payments you need to do to your vendors in future will fall on this.
In Journal all first transactions are recorded with specific date then these entries categorized into different accounts like sales, purchase etc. in a book called Ledger. In manual accounting all these entries need to be done manually but in accounting software respective ledger automatically created at the same time when we enter data in Journal.
Journal is of two types: single entry and double entry. In double entry each entry needs followed up with two accounts. This is another and detail form of journal entry.
Here is the Journal entry format:
NB: Read if you are a Student or Entrepreneur or Professional in a company.
For a very long time I have been thinking and practicing about how to improve people’s ability to be successful and in a way learning. It has always occurred to me why when a good tool or process is given to a good candidate result in higher output, but even better tools and processes fail for bad candidates.
The primary thing we all know is interest. But once that’s achieved you still suffer from bad output. Then I come across is intensity of interest. Then the motivation and gain of the intensity of interest. But still it was hard.
Then recently I concluded, everyone is missing some core things that they need to know to leverage and intensify their speed towards becoming the better self. The followings are key essential human characteristics that need to be correctly identified and practiced:
2. Problem solving 101
3. Responsibility, Objective clarity and ownership
4. Science and engineering of successful networking and practice to leverage daily.
5. Effective Googling (Or, you can say effective way of asking question and finding answers)[because if you can’t google correctly you get garbage ]
6. Emotional intelligence (a basic average here is still good)
Each of these points have many broad steps if practiced will work really fast in your favor.
I think these foundations and principles of getting successful should be taught to entrepreneurs, professionals, students and even normal people in their curricula. Even Superman had Kryptonite These are actually not difficult and can be taught and practiced easily.
So I have started sessions for our employees weekly. In future I’ll conduct this in colleges we normally get interns and hires from. We hope we can get people who already practiced and acquainted in these processes.
We’ll continuously post things on our blog and what we discussed here each week. Please do subscribe to our blog to get the email notifications when we post new things. You can find the subscription form here: http://eepurl.com/b0-UQL
So last week we introduced a cool new feature called saved searches and we introduced a budgeting of such. With this tool you can save the search that you frequently do and a bit frustrated to filter the Cash summery every time.
As shown in the picture. Once you searched something in the cash summery, click on the star icon to save that search. You can keep the dates boundary for your search or keep it open for adjusting to any date.
Plus you can mention the budgets you want to create. You can do budgeting for either income or expense for now.
This kind of budgeting would help you in budgeting expenses for a particular project or for a particular employee or activity that you tagged.
We’ll soon publish a video explaining what more and effective you can do with this tool. Till then ponder over your own ideas and create fabulous saved searches and budgets for them. And do let us know how it helped you.
Try it. See ya.
Once you’ve achieving recommended CIH, for couple of months and continuous good sales for 6-8 months, your next job as a business owner should be about straightening the revenue curve.
Might be now your revenue graph seems like this:
What you want to make it is like this:
Look we are not growing our revenues like anything, but we are ensuring our revenues curve straightens towards top. This ensures we can at least have this many revenue at any given month. It removes the basic fear of decision making if you don’t know if your next month sales will plummet. This also can help you in planning your hiring, fund planning, stock planning etc. This makes you now a serious businessman.
Now if we study the current graph of yours it might be a result of the issue of sales or product delivery. But now an effective CEO needs to ensure his curves are straightened on top of which he can make baseline decisions as we just discussed above.
Now let’s see the few steps necessary to make it happen:
And now ensure minimum target is set and make sure your organisation achieve it each month or quarter. Hope it helps
Ask us if you need any help doing these planning inside SlickAccount.
I’m not a good marketer. Neither a good sales person. ( my mom warned me not to use businessman and salesman in my words, so I’m writing sales person 😛 ) But when I’m in sales mood my conversion rates in sales go real higher. So here is a little secrete that can improve your sales much higher, as high as 20-35%. Especially effective for people who also understand what their service or product really is.
When meeting a customer don’t talk project or price from the start. Listen to your customers explaining why they want the product in the first place. In web design business, I used to ask, “What do you think a website can do for you?” or like, “Why do you want a website for your business?” You know it’s different than I’m telling what we do and how we are different.
Then listen. Listen till they drain up all their motivations and influencers who told them to make a website in the first place. This is really wonderful. You get to know who they really are. What’s the situation of their business. How their friends make them to think about designing a website can solve their issues. I heard like “My offline business is doing good. But you know I’m missing ways to scale up my market reach and sales. My XYZ friend who came for a dinner last month told me by creating a website I can get lots of inquiries from people who are searching for services like me. Also my YYN I HATE THAT GUY competitor is growing by creating a website.”
Then see when influencers are these, you can’t talk a lot about branding and colors. You should be better talking about if this piece of design can solve their issue. You also need to tell, what else may be required to scale this up too, like may be SEO etc. if you want.
Then I agree to what he said, “Yes! We could improve the sales of XXR OF OUR SWEET CLIENT to some X% by creating a better website.” And they inquire more and I try to confine the discussion to few more lines.
Then I ask, “How does your company want to represent it to your client? What’s the way you do market? And what your customers ask you often when doing sales?” or “I heard about XX company in your space. How is your solution or customer segment is different than them?” See here you are gathering ways you can make them successful online too. For new businesses it may be difficult to get a real picture.
Then listen to them carefully. See I don’t talk the design, look and feel of the website. I talk about their vision of their own company. Listen to phrases like “We want to be caring”, “We are actually good at XX, which can solve XX in the whole process”, “We make products with lot of care and heart”, “As we grow we want to be different than other companies and make our customers save more”, “We hate this, the other company is doing”. If you are listening to stuffs like our customers love it, then it’s time making customers the center piece.
Understand, for every company owner, his company is really good and he wants his company should look good as their sales man. And frankly they don’t know what color is best for them or what style, they just saw it somewhere or think of that would be best. It’s your job to recommend them a color. But understand their brand color and why these colors are or should be there. If indeed.
And when it comes to telling about price, just tell what your best upper price is. Never hesitate to tell. Or else they’ll feel you are cheating them. If they are that comfortable, which often they become, when they reach to this point. They would tell either “OK! that sounds good when should I pay?” or they would tell, “look I don’t have this amount of money?” or “The others say XX REAL LOW PRICE, your price is really high”.
If you get the first one then congratulations. You owe me a treat
If you got the last two, this is the time to tell why you are different. They just experienced a bit of it. It’ll help them compare the money they are paying vs the benefit they’ll get for it. If possible you can give them a ROI demo. And then tell how taking low money like others force you not to do good work. Explain them your expenses including salaries etc. if you can. People don’t want to hurt you. They would be OK and love to help you and also themselves.
If they stick to the price stuff, you should understand they are not yet well convinced. Often I say thank you at this stage, because I knew my time is much worthier. And I say “loved talking to you, You can look for X, Y and Z good designer out there who work at low price. They may help you? Wishes for your business, it’s just that my expenses are little higher and I can’t help reduce it :)” Don’t make them feel guilty. Sometimes they bring you more clients or comeback when they have money.
But if you feel the customer worth it, then you can ask, “What should be the price, you think?” And tell “See I can provide you this much in that price and you’ll be loosing XXX”. Look customers love getting value more than the discounts, though discounts can quicken the process. Read my upcoming book “3 Ways to Price: Part-I” releasing coming Sunday, before giving a discount.
Understand sometimes customers really don’t have money to pay you. That’s OK. If you can’t help with price, just refer them to others. I usually tell “Ask me any other help when you need like advise on designs if I’ll have time, I’d love you help you grow.” Sometimes I sit with the customer to figure out where they should start with the little money and then as some money flows in how to improve bit by bit.
But if you need to get to the conclusion. You need to understand why something is important for them and why they put money into it. Customers often don’t tell you what they exactly need from a service and you can’t guess either. Better ask them to explain, why it’s important. You’ll figure things out much better.
We see many businesses trying to get lot of income in a highly competitive market by providing their services and product really cheap. While this is not a bad thing to be known as Low Price King if you did your maths on pricing and how to deliver in budget, many among you file losses due to avoidance of Rule No1 of this market. i.e. “Be Lean & Stick to the plan”
You could be able to provide products because you figured out the volume to sell, maintaining the operation etc. Like in case of WallMart or BigBazaar in India, they have a very great supply chain to make them be able to do it.
So it’s important for your business not to be slightly over budget in any field. The major problem comes in Operations. You need to be lean and should use perfect tools and checks (bound by time & budget) in place to do so.
Let me give you an example:
If a small shop will sell 500 pieces of AwesomeCheapThing at $1 eachday with a profit margin of just 5cents, he gets (5×500)/100 = $25 in profit eachday. Let’s see if one day its supply truck came late by just 1 hour which reduced its sell to mere 450 pieces for that day. He lost 5×50 = $2.5 on direct sell. But if we analyze what he actually lost, we got to know he pays his sells man for that 1 hour without selling anything + electricity cost etc + he spent little extra for inventory of that 50 pieces which made his loss to little more higher making that product price to sell at $1.5. But we guys have a tendency to neglect such minor stuffs and we just think that we lost only $2.5 for that day.
But the guy who is selling it at $10 and sell only 3 pieces may not have that much of trouble and all extras can be adjusted to his profit.
So if you guys operate in a low profit environment, being lean and on time makes sense else you might be doing just another business that’s losing the only issue here is that you don’t know where you lost it. You can to stick as some high strength glue to your operation plans. Losing is not a bad thing but knowing where exactly you lost is real crucial for you.