Article provided by EasyBiz
Cash flow is the lifeblood of any business, however, ensuring a positive flow can prove especially challenging for small and medium enterprise (SME) owners with multiple projects on the go. As there are some factors that are out of the business owner’s control, such as late payments from clients, it is vital for small business owners to ensure their projects are profitable to provide their business with a cushion.
This is according to Lauren du Plooy, director at Rae & Associates and QuickBooks trainer/writer who says that in an ideal world, every small business would be in a position to employ a project lead who could ensure projects are correctly scoped, managed and tracked, and, most importantly, correctly invoiced.
“However, as entrepreneurs are known to wear many hats, oftentimes small business owners fill this role themselves,” she says. “When you’re performing a juggling act with hundreds of balls, things can fall off the radar – slips get lost and smaller project spends are overlooked or forgotten and all of this can add up.”
Du Plooy and her team offer professional business consulting, services and products for entrepreneurs and business owners and she says they see this kind of oversight often with clients – the results are as one might expect – projects can end up costing the business money.
Project profitability or lack thereof shouldn’t be a mystery, she points out, and it is for this reason that Intuit QuickBooks have introduced their Projects Profitability feature to the South African Market. “Technology is providing businesses with impressive tools that are able to manage calculations and tracking, ensuring business owners who should be constantly aware of their bottom line are costing correctly.”
It also allows users to keep track of every expense including petrol, travel, incidentals and time with all this information displayed on a dashboard. This also includes those that may be reaching shaky ground in as far as profitability,” du Plooy adds.
This type of functionality greatly empowers business owners. “With a quick view, they are able to immediately confirm client requests that are in scope and have the necessary discussion around those that aren’t. They are also able to ensure the project team resources are on track for time promised and delivered, including non-billable time, which is invaluable to know for future project scopes.”
Most businesses drive the opportunity to secure retainer work and it can be easy to over-deliver in these situations. In fact, without constant monitoring of time and expenses, businesses can slip into a rhythm with clients that sees these elements being misused.
“An effective cloud accounting solution can help business owners capture costs on-the-fly, which enables them to demonstrate exactly which areas are aligned to project scope and which aren’t when the time comes to have potentially difficult conversations with their clients,” says Du Plooy. “For businesses looking at accounting solutions now, my advice to them is to investigate their options thoroughly.”
“The ideal package for businesses wanting to grow will be versatile, available anywhere and through any device and be rich in features. Being able to deliver a trial balance and customised invoices is no longer sufficient, our clients today are demanding much more from their software and this includes a need to ensure they are costing their projects efficiently, addressing one of the major challenges faced by thinly stretched project-based businesses today,” she concludes.