A substantial portion of the day of every business manager is spent dealing with problems. Serious business problems generally occur unexpectedly and to the unprepared. The difficulty always is to know you actually have a problem to solve. It’s absolutely essential that every manager is skilled in the art of problem solving.

You have to have well thought through financial controls to run a good business. Good financial controls can be likened to alarm systems that alert managers to financial problems. small business accounting software will help you generate the reports you need to implement good financial controls. For example good small business accounting software should produce reports that can compare the values of sales versus expenses in the budget to those resulting from actual activities. Think carefully about what you want to track and monitor, pick a small group of key numbers and ratios and then design and test the reports to make sure you get the information you need, when you need it.

It is essential you consistently track margins and immediately scrutinise and address any differences regardless how small. If you sell products in volume any sudden change in margins can multiply into losses very quickly and therefore it follows that any decreases in volumes should be immediate cause for concern and therefore having up to date information available is critical. Fixed costs should be closely monitored in the early part of the financial period to be sure they are following the business plan. The Average number of days it takes for your customers to pay you should be monitored closely and you can do this be running the Debtors report in your small business accounting software.

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.