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Digital Marketing - Complete Controller

The success of any company, no matter the size, lies in its profitability. How to reach profitability will depend on what stage the business has achieved. The plan of attack will be different for a business at start-up from a business that has been around for many years. Regardless, every small business has a greater chance of growth, depending on how much effort gets put into making a profit. In this digital marketing and social media era, a small business owner can maximize their sales and marketing strategies with little to no cost, no matter what stage of maturity the business has achieved. Here are some ways to maximize profits through digital marketing. Check out America's Best Bookkeepers

Audience

Before launching any successful digital marketing campaign, you must determine who your target audience is to purchase your product or services. The factors you need to consider are age, gender, and region. Some products and services don’t have specific targets that fall in all three of those areas. For example, those in need of a plumber won’t need to be a particular age-range or gender, but they will need to be in the same area of the plumber they hire. While feminine products will have a specific gender and age range, the region won’t have any impact. Knowing your target audience will ensure that your digital marketing reaches those people with the most potential to bring business your way. Check out America's Best Bookkeepers

Content

Once your audience is determined, it’s time to build content. Content can be anything from Tweets of 160 characters or less to keyword-heavy blog posts on your website. The most crucial factor to remember is that the purpose of content is to drive people to your product or services. When composing posts or ads, keywords are the primary focus. Also, adding eye-catching visuals when possible can boost the effectiveness of your content. It needs to be thoughtful as far as how it will positively impact your business and other goals like shareability.

Social Media Platforms

When it comes to marketing, people might think more is more, but that is not necessarily true. If you are a business with a large and well-funded marketing department, you can afford to post on every social media platform that exists. But small to mid-sized businesses must be more thoughtful and choose a few platforms on which to work. The fab four to focus on would be Facebook, Instagram, Twitter, and YouTube. Other sites to consider would be Snapchat and Pinterest. Both of those had a substantial market share among social media platforms a few years ago, but they have tapered off in popularity. The four mentioned have remained strong, with no signs of slowing down any time soon. Therefore, they are where you should focus your primary digital marketing strategies. Check out America's Best Bookkeepers

Emailing

Emailing is still a strong contender when it comes to digital marketing. Some services will assist you in launching email campaigns, but you still have to understand your target customer. A successful email marketing strategy will drive customers in and not away. If a customer subscribes through your website or business page, they expect to have occasional updates, not daily inbox stuffing emails they will delete. Most customers are comfortable with weekly or biweekly emails featuring relevant content.

Conclusion

Every business has its success measured by profits. To create success, you must focus on digital marketing strategies. Focus on your audience, content, social media platforms, and other digital marketing options such as email, and you will see your business grow. Most effective digital marketing efforts cost little to no money thus protecting profits while making them expand.

 

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers

Imagine that you see your accountant at year-end to examine your taxes along with profit versus cash, and you receive great news. Your business has made a substantial profit, but you’re dumbfounded because there’s no cash in the bank account, and you have no idea about how your income tax will be paid. You must be wondering about the possibility of this happening as it’s strange for a business to make profits while not having any cash at the year-end. You might not believe it, but businesses face this scenario regularly. Check out America's Best Bookkeepers

 

Profit versus cash: Basic difference

All the cash withdrawals and deposits in a business collectively form its cash flow. The profit for any business is the variance between income and sales, including the expenses that were incurred to make that sale. There are ways a company can have positive cash flow but will show no profit for it, such as in cases involving the acquisition of loans or owners’ equity in the form of cash. If this happens, this would not be counted as an asset of a business. Rather it’s a liability that needs to be paid off.

Contrariwise, a business would incur negative cash flows while making profits at the same time, if the owner takes money out of the business for personal use or make other investments. The essential difference between profit versus cash resides in the source of the transaction as for what purpose the money is coming in or going out of the business. Check out America's Best Bookkeepers

Cash

Cash, which is referred to as cash flow in business terms, is the amount that flows in and out of the firm in lieu of its operations, funding, and investing activities. This is the money that is a requirement for a business to meet it’s current and future obligations. There are two main things about profit versus cash flows that must be kept in mind.

  • As discussed above, even a profitable business may have satisfactory cash to meet its daily demands. In the worst cases, inadequate cash flow can also lead businesses to bankruptcy. For example, you’re a manufacturer and have sold off your product at a profit. However, there is a long sales chain, which means that you would not receive the payment for the next 2, 3 months. It may sound like a lot of time, but such periods are quite normal among large businesses. Since your business is not yet established, you may not get enough time to pay your suppliers.
  • Your sales may be rising, and you keep receiving the cash. However, that doesn’t necessarily mean that you are making profits. In case you had borrowed the money to solve the cash situation, the increasing debt expenses can raise your costs above the breakeven, ultimately drying your cash flow and resulting in catastrophe for your business. Check out America's Best Bookkeepers

Profits

Profits are also known as net income and are the amount that remains after subtracting all the expenses from sales. It is a known fact that no business can sustain without profits. However, sometimes as your product starts selling, the expenses can rise even further. While analyzing profit versus cash, we see that they are similar in specific ways as well as different in others. Unless you have a clear understanding of all your costs and expenses, you cannot have a clear picture of your profits.

Often at times of rapid profits, the operational costs and other expenses increase at such a rapid rate that you are not able to cope up with the pace, therefore, leading to business failure. And this does not even include issues related to customer service, human resources, and leadership.

In an emerging business, keeping track of profit versus cash also entails catering to these related issues. At times it may even become essential to restrict the growth rate to assure long-term success.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers

Businessman composing a successful financial chart with arrow going up, he is using green paper cuts, eco business and financial success concept
An MBA graduate or accountant that has a profound accounting and financial knowledge may be able to state a clear-cut distinction between the terms profits and profitability. For a businessperson, it is not that hard either. We know that any business stands strong in the market because of the profits it makes. When it comes to business growth and expansion, these two terms play an influential role in defining what’s suitable and what’s right for a company—whether the financial grounds or bookkeeping records are favorable or not. One thing is very clear, regardless of size, businesses need to track their profit margin in order to make wise financial decisions that are important in strategic terms.  

The Basic Difference—Profit vs. Profitability

Profit and profitability are two terms that are often used interchangeably, however, they are not the same. The interpretation of both terms is different and those who are able to interpret them correctly can expect to witness financial success of a company. To determine whether a company is financially sound or not, business owners and investors need to track the company’s profit from its profitability. To keep the business afloat, you need to ensure a smooth working capital and cut business costs and expenses as much as possible. In simplest terms, whatever amount is left after subtracting the total expenses from the total revenues is profit. Similarly, the profit margin is the ratio between the net income and total sales as it is measured as a ratio or percentage.

Defining a Company’s Profit

If we go deep into the application of calculating a company’s profits and you are a professional accountant or bookkeeper, it won’t be hard. You need to sum up or add the total revenues and subtract the total expenses to get the amount of total profit. The point is, profit is an absolute term and we have a simple formula for calculating it.

Total profit= Total revenue – Total expenses

Evaluating Profit in Business Perspective

When we evaluate the term in a business perspective, we know that a company’s core objective is always to make a profit. Without making a profit, no company can survive in the market for long. Obviously, what is earned is invested back into the business and a company will grow slowly and gradually. But, the point is, profit alone as a measure of success can be deceiving. There are different routes to calculating a profit margin and business owners need to note minor cost shifts. The bottom line is, your income statement shows you whether you are making a profit or not. If the results are negative figures, you need to cut or readjust your business expenses or costs in order to ensure a profit.

Defining Company’s Profitability

The application for calculating profitability is a bit more complicated than calculating a normal profit. It involves percentages or ratios which show that profitability is the measurement of profit. Business owners need to ensure that their profitability index is positive in order to yield enough profit to sustain and grow, especially when the market competition is intense. A business requires careful financial tracking and controlling.

Profitability is the degree to which a business yields a financial gain. Although the company may be showing or realizing a profit margin and figures may seem to be attractive initially, this doesn’t necessarily mean that the company is profitable. Profitability is matched and contrasted against many aspects of the business; you must learn the art of the game before calculating the exact profitability index for your firm. Since profitability is the relative amount (a ration or percentage), it shows or expresses a ration between profit and revenue. The formula for calculating profitability or profit margin can be:

Profitability= Profit/Revenue* 100


Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

 


Are you going to start a business? Do you already know how much money you want to earn? This is one of the first aspects that you have to consider. To do this, you must familiarize yourself with the concept of net profit margin that possesses significant importance in bookkeeping.

Net Profit Margin

The net profit margin of a product is the difference between the sale price to the final consumer (without value added tax) and the costs of production or purchase of the said product. According to this, the formula to calculate the net profit margin is:

Net profit margin = (Retail price without value added tax) – (Production or purchase costs)

Furthermore, it is examined that the net profit margin is similar, but different from the “percentage of profit” term, by dividing the net profit of the sale into the cost of goods to help examine the sum of profit on the sale of the goods of a company, not the profit of the company. Rarely, the individual figures of a company (such as income or expenses) can mean much about the profitability of a company and looking at a company’s earnings often does not tell the full story. An increase in profit is a good indication, but it does not mean that the company is improving its overall profit margins. For example, let’s say that the revenue that Firm A provides in a year is $2 million with accumulate spending of $ 650,000. This will provide a net profit margin of 67.5% ($2M – $0.65M / $2M = 1.35M / $2M = 0.675 = 67.5%). However, suppose that the revenue of the company increased next year to $2.25 million, while spending increased to $2.12 million, then the net profit margin would be 11.11% (2.25M – $2M = 0.25M / $2.25M = 0.11 = 11.11%). Despite the increase in revenue, Firm A’s net profit margin decreased as expenses increased more quickly than income.

Likewise, increasing or decreasing a company’s spending does not indicate that the company improves or worsens their net profit margin. Assume that Firm B has a revenue and expense of $2 million and $1.5 million, respectively, in one year, which has a net profit margin of 25%. However, in the following year, the firm is restructuring by lowering its total revenue in lowering its expenditure by lifting a product line. If the second-year income and expenses of Firm B are $1.5 million and $1.2 million respectively, the net profit margin is now 20%. Thus, Firm B has significantly lowered its costs, but net profit margin has fallen because revenue falls faster than spending.

Net Profit Margin Limitations

The net profit margin carries some concomitant limitations. Although, it is a useful and popular rate. Like any financial indicator or rate, it is useful to assess the profitability of a company. Although net profit margin can be effective for the comparison of a company’s performance within the same industry that have similar business models. Several companies in the sector tend to have different business models and sources of income, so they can have very different net earnings. This can lead to comparisons, which generally do not make sense. For instance, a company that sells luxury products can have a high percentage of profits in its products along with a low supply and a relatively low load while maintaining a high profit. On the other hand, because of the need to increase the workload and space, the stapler can have a lower snow level a larger stock, and a greater load.

Net Profit Margin Variations

There are several changes in the net profit margin that analysts and investors utilize to determine certain aspects of the profitability of a firm. Such a variation is the net profit margin that is acquired by dividing the net profit by the earned income. This change has some limitations, as management often has too much control over material costs. In such a scenario, the net profit margin is less effective in defining the overall quality of management. Additionally, industries that do not have a manufacturing process have no or low sales costs. The net profit margin is effective when it comes to companies that are actually involved in producing certain goods. A specific variation of the net profit margin is the operating profit margin that divides the operating profit into income distributions. Traders and analysts can often use pre-tax profit margins by dividing their pre-tax earnings (revenue without deduction of tax costs) on a revenue basis.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

As a new business owner, when you finally turn a profit, you are tempted to stuff all of that money directly in your wallet. Well, be patient, here are some reasons why delaying your gratification will pay off!  Invest profit into your business with these simple guidelines.

 

How much of my profit should I be reinvesting into my company; I need personal income too!

Building your company to profitable can be a grueling process. Working extra-long hours, scraping pennies together, and working harder than anybody else for little reward. Once a profit is achieved, you think my work has paid off and, it has, but if you want to continue to increase that profit, be careful to choose your next money move wisely. Before you cash out, remember it takes money to make money, investing some of that money back into your business will be an invaluable decision. Of course, you have financial responsibilities of your own, and you need an income, too, so find the right balance. Check out America's Best Bookkeepers

 

Reinvesting about 50% of profits will get you moving in the right direction. This means if your net profit is $60,000, then you can afford to invest $30,000 into your company and, now you have a modest $30,000 a year salary. Invest that $30,000 into the building and advertising your company, that number will increase as your company grows. Pocketing that money halts your growth, you will continue to generate a net profit of $60,000. Let’s say we invest $30,000, and because we were able to improve our company, next year your net profit is $120,000, again we invest half. Still, we are pocketing that $60,000 that we refrained from keeping last year but with the opportunity to double our profits again!

 

Invest in my business, sure, but where? Here are three areas you can start with

We have established that it takes money to make money, but how can be a difficult question that depends on your business and how much time and money you have to spend. Three options that are sure to be useful are; advertising, get your name out there show the world who you are; invest in increasing your skill-set, you and your employees can benefit from new coaching and experiences; build your company to its potential, don’t underestimate your company, invest in its growth. Check out America's Best Bookkeepers

 

Advertising

There are tons of affordable ways to advertise your company and, with the world wide web, a lot of places to do it!

  • Making your company a website.

If you don’t have a website, this is a great way to get across information about you and your services in a place that is easy for your potential clients to find and access.

  • Social Media.

Use social media to post your information.  This can even be free, use Facebook, Twitter, Instagram.

  • Make a commercial

You can show this commercial online for free, post it to your website or YouTube.

 

Increasing your skills

By strengthening your and your team’s knowledge and skills, you add value to your service. Invest in certifications related to your service, have someone come in to teach you how to advertise, have an expert teach you how to maintain your website, attend conferences. This will take time and money, but you will have a new skill set that will be continuously useful, you are never done learning. Check out America's Best Bookkeepers

 

Building your company

Invest in your company’s growth; look at what you will need to develop and expand if your company does start to generate more business. Hire new employees, rent new office space, or find another company to team up with. Envision the change you want to see and know what your company’s growth will demand optimal performance. Always calculate the risks of your investments and choose which options are most helpful for your company at the time. Do your homework, plan for future investments, move forward when you are comfortable with making them, and watch your company grow!

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers