How to Keep Your Financials Consistent in 2016
February 08, 2016
Consistency is not just what you project to the customer. It’s also the key to running a successful business. We recently talked about the importance of consistent hiring, and five qualities that every U.S. Lawns employee should have. Now let’s drill down further, examining your business by the numbers. When it comes to your books and accounting, it’s no secret that consistency matters. So, are you keeping your financials steady and on-point? Here are a few areas to look at:
- Make it easy for customers to pay you. We all know there are two ways to increase profits: collect more revenue, or reduce your overhead. The revenue part of this equation is usually associated with sales; but no matter how good your sales team is, it’s all imaginary money until the customer’s check has cleared the bank. Customers who don’t pay on time are a serious liability to the consistency of your operation. If your cash flow is currently being affected by this issue, consider making it easier for the customer to pay. Send invoices in a regular fashion, make your terms explicit, and allow for easy, convenient, standardized payment methods. For instance, our customer portal allows for online billing and payment, using ACH, e-checks, or credit cards. Not only does this make collecting revenue easier, it also creates consistency for the customer. You might be surprised at how much more cash you suddenly seem to have.
- Use standard estimating tools. Those of us who’ve spent years in the industry think we can eyeball a job and know what it costs. But don’t rely on your expertise alone. Inconsistent estimating can quickly kill your profits, especially if you tend to underbid. Not only that, it sends a message to your customer that price is negotiable, and they might get a better deal elsewhere. The truth is, when you’re estimating by “gut,” your price is arbitrary. The only way to get it right is using a consistent approach. At U.S. Lawns, we provide standard estimating tools, and we’ll work with you as you’re learning to use it. Consistency means every franchise, from coast to coast, using the same estimating formulas. Your customers will appreciate it. And so will your financials.
- Never stray from your budget. A road map is the ultimate symbol of consistency: no matter how far you travel, you’re always on the same path. This metaphor also applies to your budget. It’s not enough to simply create one; you can’t step off the road. (The same goes for your P&L statements, and all other accounting records you keep.) Yes, the picture may change from one month to the next—that’s exactly why you need to track your financials so carefully. It’s also why your budget is a living document, to be adjusted as circumstances require. But your budget should never be abandoned or forgotten, for any period of time. Here’s something else to remember: we are all part of the U.S. Lawns network, and our individual budgets contribute to the financials of U.S. Lawns as a whole. That means when our support team works with you to establish a budget every year, it’s in the best interest of our entire brand. We are only consistent together if each one of us stays consistent individually.
Consistent budgeting, estimating and billing will help you build a solid foundation for business growth. The more consistent your financial practices, the more professional you appear to your customers. And the more you—and your team—can focus on delivering outstanding service.