Tracking Business Revenue
Now that tax time is over, business owners find themselves pulling their heads out of 2011 and turning their focus to more important matters like how they are doing in 2012. The very first and most basic way to see how a business is doing is by tracking revenue. Unfortunately most business owners stop there. Organizing and tracking revenue is critical to the success of your business. Regardless of how a business generates revenue, identify and track it in an organized and meaningful way. Here are a few basic points to make sure revenue is being tracked correctly.
1. Divide revenue into major, relevant categories. This way both the specific source and respective amounts of each revenue stream can be identified. Track revenue by product, service, customer, profit unit, region or any other relevant method. For example, say you own a bicycle shop that does repairs, new and used sales, and rentals. There would be at least four revenue categories separating each kind of income received: repairs, new sales, used sales, and rentals. This will allow you to see the customers, products or services that generate the greatest amount of revenue. It also allows for a comparison of profitability and the amount of contribution to the bottom line from each individual revenue stream.
2. Each week pick a day that will be a “cut-off” day such as Friday or Saturday and on this day summarize the following data:
- Current week’s revenue
- Previous week’s revenue
- Current month-to-date revenue
- Revenue for the same period last month
- Weekly and month-to-date revenue for the same period of last year
- Year-to-date revenue for the current year
- Year-to-date revenue for the same period of last year
- At the end of each month summarize the following data:
* Revenue for the current month just ended
* Revenue for the previous month
* Revenue for the same month last year
* Year-to-date revenue for the current year
* Year-to-date revenue for the same period last year
Remember to separate all revenue comparisons into major relevant categories (products, service, customer, new and used sales, etc.) as well as the totals. This level of revenue detail can be integrated into future strategic planning and marketing to help grow the business and improve its profitability. Tracking business revenue in an organized and systematic way can help target and capture a greater market share of those more lucrative revenue streams.
If it is more and more difficult to manage bookkeeping and accounting tasks, call or email Your Administrative Solutions for a free consultation at 1-866-363-5580 or fran@youradministrativesolutions.com
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