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Do You Know Your Numbers?

Specifically, do you know how much money is owed to your firm right now?

Software Upgrade Creates New Problems

One client of mine had switched her practice management software after having changed her accounting software a bit before. What no one had told her was that no legacy data would be able to be imported correctly. For example, she could bring in outstanding accounts, but the dates would all default to the date she imported the information, not when the client had been invoiced or anything else. This led to an incorrect aging from that point forward. In order to know how much was truly owed and over what time frame, she had to look at her aging and a manual ledger she kept with the correct, older information. Then she had to manually work up the correct numbers and timeframe. This all took too much time. The result was that she did not know exactly where she was with each client, easily.

Often my clients have recently changed:

1) Accounting software package

2) Bookkeeper

3) Time tracking/invoicing software

The resulting problems are:

a) an aging that no longer shows the complete picture

b) two or more, different, aging reports that do not mesh

c) siloed information that is not easy to access anymore

Trying to Plan Without Solid Numbers - Oy!

If you experience any of the above, you do not know your numbers and you feel uneasy or unsure about where your firm is financially. This is true even if your numbers have been O.K. in the past. That unease can translate into sleepless nights, the inability to decide what good decisions are financially in the coming year, even to what size bonuses you can truly afford. And how about that raise to yourself you have been putting off?

Practical Tip #1 - Create a manual, true aging, in one spreadsheet that you can easily maintain.

1) Carve out a block of uninterrupted time

2) Put all clients on one spreadsheet

3) Put the amount owed in the following categories: Current, 30, 60, 90, 120+ days overdue

See my sample (image below) for other helpful columns. I will talk more about them in future tips.

Once you have all of your numbers in one, easy to understand spreadsheet, you are ready to create a strategy. Congratulations!

And if you need help with this step, please Contact me today.


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