The number of hours per day spent solving problems has the biggest impact on the time of good business managers. What can go wrong generally will when you least expect it. Knowing you have a real problem to solve can only happen if you know what you should be watching. Business management goes hand in hand with problem resolution.

All businesses should have managers who know the importance of and can implement financial controls. Financial controls are the guardians that detect and bring problems to the manager’s attention. Many financial controls are accounting based and need to be implemented in the reports of generated by small business accounting software. Make sure you have sufficiently competent small business accounting software that can produce the reports you need to track and monitor budget versus actual performance in areas such as revenue, fixed expenses and profitability. Design your reports by selecting a small group of key numbers and operating ratios you need to manage and then as you become more comfortable with this approach add more complexity.

Always monitor the margins on the items that you sell and as soon as you detect any changes in their values you should take steps to understand why this is happening and bring it under control. Changes in margins or volumes in businesses that sell large numbers of products are especially vulnerable and losses can mount quickly if the causes are not quickly understood and addressed. It is good practise to focus on the behaviour of fixed costs against your business plan especially at the beginning of a financial year. Tracking the average number of days it takes to collect payment on invoices is key to accurate cash flow forecasting and most small business accounting software reporting systems will help you easily do this.

Experience is the way to learn and over time you will learn which financial controls should be highlighted in your accounting reports, just make sure you have the right small business accounting software that can generate these.