Think about all of the administrative functions that have to be managed every day in your business. From payroll to accounts payable to collections… the list goes on and on, and you can’t afford to drop the ball anywhere.
“If you don’t know where you’ve been and you don’t know where you’re going, how do you know how the decisions that you make will financially impact the bottom line?” –Tammy Haney
Tammy Haney, administrative professional and controller of Rea & Associates, a multi-office regional CPA firm, joins us on this episode of unsuitable on Rea Radio to discuss your business’s central administrative responsibilities, their impact on the bottom line, and best practices that will help you avoid headaches in the future.
It all starts with the budget
One of the most important administrative tools any business should have is an accurate and up-to-date budget. A good budget can serve as a decision-making compass.
Tammy explains that Rea’s rolling budget is a live document that is regularly updated with revenue and expenditures.
To get yours just right, you’ll want to prioritize items that align business objectives, personal objectives, and profit.
Want to get paid?
Tammy provides listeners some excellent tips to help make your accounts receivable and collections process more effective.
For starters, consider creating (and using) a client acceptance policy built upon the principles of your company. The goal is to limit your exposure to risky clients. Sometimes, if the client is over a certain dollar figure, it’s good to look at customer spending habits, paying habits and debt.
Also, don’t continue to provide services if you aren’t being paid. For example, at Rea, we contact clients with accounts receivable statements after 30 days and our collections process begins after 60 days. If a client is over a certain amount or hasn’t paid for too long, we will stop working on them.
And while we’re talking about bills, don’t forget to pay your bills too.
Before engaging with a vendor, become familiar with their terms. If you aren’t happy with something, negotiate or don’t work with them. Don’t settle.
Once you have a game plan that works for you, be a good client and pay your bills. You should strive to pay your bills on a regular schedule. Whether you cut a check once a week, twice a week or once a month will depend on the size of your business and the volume of invoices, but get on a solid schedule. Doing so will help you more accurately balance the funds that are coming in to your business as well as those that are going out.
If you need a good Controller in your business, train one. Tammy says the AICPA and local associations offer excellent educational resources.
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official transcript
Click here to read the official transcript of episode 76, “how to be the administrator your business deserves.”