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How Actionable Numbers & Productive Employees Lead to Profitability?
Occupational studies around the world have established the fact that a strong connection exists between profitability and productivity in the workplace. If we talk about business operations it takes into account the competitor strategies, current market scenarios, profitable factors such as direct costs, sales, the value per unit, marketing, latest technology use, and more.
It is imperative to update your accounting records, prepare and analyze monthly/annually reports, have actionable numbers like cash flows, payrolls, balance sheets, budgeting and forecasting, etc. in place for understanding your present business position and make appropriate decisions.
These actionable numbers are also dependent upon the various costs associated with the employees such as salaries, perks, infrastructure, mediclaims, overhead costs, the ratio of incomes and employees’ expenditures, etc.
Studies on Employee Performance Engagement
As per the stats collected from the studies of Gallup Organization and The Queens School of Business, it has been observed that the workers who do not engage themselves completely in an organization make it to the possibility for 37% to miss work, 49% to face accident scenarios, and 60% to make critical work errors.
Apart from this, low worker engagement levels lead to 16% decreased business profitability. Money might be the most important thing for any business, but its employees are equally important as their engagement levels have the potential to make or break any business literally.
However, businesses cannot change the engagement levels of their employees if the employees do not have the right attitude in place, but businesses cannot even lose out on the overall profitability due to low employee engagement levels.
So, what is the solution? The solution lies in outsourcing various business processes like accounting solutions to third-party vendors due to the following benefits associated with it:-
24/7 Access & Support
Eliminated Infrastructure & IT Costs
Assured Data Security
100% Performance Guaranteed
What Actionable Numbers’ Strategies Boost Business Profitability?
When it comes to boosting the productivity of a business, it is extremely important that the actionable numbers are in place and accurate. The reason being every business decision is based upon these numbers, and if there is any kind of irregularities in these numbers, the decisions are taken in the wrong direction.
So, let’s get started and figure out the various strategies based on actionable numbers that need to be in place in order to contribute to the overall productivity of a business.
1. Set Budgeting Goals in Numbers
Before you start preparing your business plan, you should be aware of your business goals. According to PETER MANTELL, the managing partner and owner of Independent Consulting Associates, it is equally important to focus on both.
First of all, the current budget needs to be outlined and then follows forecasting, revenue projections, and hitting number targets. For instance, if you are looking for a 100% growth, and $1 million is your this year’s income, make changes to the budget in numbers if you wish to earn $2 million in the coming year.
2. Utilize Financial Reporting
The importance of financial reporting is best described in the following benefits that come along with it as discussed below:-
- Better Debt Management
Financial reporting helps in improving the management of debts and gauging liquidity by keeping track of current assets/current liabilities on the available balance.
- Trend Evaluation
Financial reporting lets you track and evaluate the past and present trends, eventually enabling you to make decisions for the required improvements.
- Real-Time Tracking
When you gain real-time insights into your financial data, you are able to make informed and accurate decisions, along with financial fluidity maintenance.
Managing credit lines, extended vendor credit, business loans, credit cards are a tough part of the liability section. Financial reporting helps in assessing any need for liability reduction before making an official request.
- Compliance and Progress
A business remains 100% compliant with financial reporting since it’s served information is both robust and accurate, boosting financial efficiency.
3. Evaluate Tax Liabilities
If the business profits are high, the taxes are also higher. Most of the business owners are astonished by the fact that they are left with a very little profit margin after tax preparation and paying the taxes. For this, financial numbers which are accurate are needed to not only evaluate the tax amount easily but to avoid resource depletion in a short time span.
Costly critical errors can only be caught when the financial reports are accurate. With the help of reconciliation, discrepancies in the numbers will let you know of any wrong practice that is taking place in your business. This is the reason business owners leave no stone unturned when it comes to finding any irregularities in their accounting records through careful checking and assessment of every single entry.
5. Streamline Payment Cycles
In accounting for business, financial statements’ accuracy holds an important role in optimizing the accounts receivable and accounts payable processes. Apart from this, shareholder dividends, inventory needs, payroll, creditors’ payment, etc. cannot be managed properly if the numbers are not in the right order. Every mathematical calculation for any kind of payment cycle is only possible when correct financial figures are available.
6. Better Planning, Decision Making, and Forecasting
In order to make any business decision, it is important that the financial statements are analyzed properly. A window for intelligent strategic planning and decision making (both internal and external) is opened with the help of accurate financial statements.
Business owners can easily know about the cash flow, capital, and fund flow statements, along with effortless consultation of the trading account every single day to evaluate the amount of money earned, the amount needed, and forecast ‘yearly sales increase’ for a financial boost.
The Role of Productive Employees to Profitability
It is not just your value proposition, working capital, and unique technology but your people too who are the biggest assets of your business. Your productive employees add value to your business and bring in the profitability you always wished for.
So, it makes sense to retain them since hiring and training costs, along with the loss in productivity is witnessed when such productive employees leave an organization.
Good salaries definitely make the employees happy, but it is not the only thing required as it is equally important to make them feel recognized and appreciated at every level, and when you do, they do not leave any stone unturned when it comes to putting the maximum efforts.
Apart from this, rewarding them every time for their exceptional performances give them a boost and makes them feel that the company is noticing their good efforts and also taking care of it.
Another way to deal with such a situation is by opting for outsourcing accounting as discussed above. This way, you gain access to the experience and skills of outsider employees and remove the costs of hiring, training, and infrastructure for your in-house staff, along with an increase in work productivity and efficiency.
Every business today wants to grow on a consistent basis and reach its set targets at the end of the year. Accurate financial statements are extremely important when it comes to making critical business decisions based on the numbers, and this accuracy can only be achieved if a business manages its finances to perfection.
Apart from this, businesses should realize that their employees are the sole reason whose efficiencies have paid off for the profits which they are earning. So, it is imperative that a business retains its productive employees and also, outsource some of the back-office tasks to third-party vendors that can act as a backup for your existing team, share their burden of tasks and also guarantee you continuous work.
Are you looking for an outsourcing partner to assist your onboard staff and ensure continuous workflow? Search no further because Cogneesol provides experienced and professional off-shore staff who will assist you with your work. Contact us today!
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