|
|
|
|
|
|
Greetings!
Most small businesses are looking for ways to cut costs--
but we think they are going about it the wrong way.
Slash-and-burn
tactics have proven to be ineffective for the long term. Trimming expenses here
and there isn't enough to deal with the magnitude of the drop in demand.
What
companies need is a powerful tool to pinpoint with laser focus on specific
areas to reduce costs and boost their bottom line.
That's why we are strong believers in customer
profitability. Read more below on how to
start using this tool in your business. And if you find you need some help, let us know. We're specialists in the area.
|
|
|
Want to boost profits? Fire your "best" customers.
You pick up the phone, it's "them" again-- you know, the
customer that calls and complains, who needs everything delivered yesterday and
who pays late? You are miserable serving them but, hey, they are one of your
best customers-- they buy a lot and have done so for years.
News flash: It might be time to give them the ax.
"Are you crazy?" you may be thinking, "Fire a customer in this economy, when
business is down 50% and I am struggling to keep the few customers I do have? Why
let them go?"
Because you might make more money if you do.
Studies have shown that the 80/20 rule applies to profits as
well as sales. That means that a typical
company makes no money or loses money on 80% of their customers.
Measuring customer profitability is a powerful tool to improve your profits
especially in this economy.
Here's a simple example on how getting rid of a
profit-draining customer (Customer P) can boost your bottom line.
Even though sales without Customer P have been nearly halved,
profits have increased by 50%, and margins have more than doubled. You won't get results like that with typical
cost-cutting measures.
Read more about what to do with money-losing customers>>>
|
 |
|
Writing off those uncollectable invoices...
We asked
Steve Kishel from Parente Randolph when businesses can write off an
uncollectable receivable and take a deduction.
Bad debts are deductible in the year that they become worthless. But how
you record them depends if you report your taxes on a cash basis or an accrual
basis. (Ask your accountant if you do not know.)
Cash-basis
businesses: you can deduct the bad debt if the cash loss has been
sustained or if the amount has already been included in income.
Accrual-basis
businesses: Bad debts can be charged off based on worthlessness but
you cannot write off bad debt merely because you give up attempts to collect.
There are a number of different methods to writing off bad debt for
accrual-based businesses so check with your accountant.
In either case, Steve recommends it is best to document all attempts made to
try to collect the debt, such as telephone calls, letters sent, or any other
correspondence. Also, you can deduct all expenses paid in conjunction
with trying to collect the receivable such as attorney cost, filing fees, or
collection agency fees.
|
| |
|
QuickBooks Quick Tip:
Judi Frank of Frank's Bookkeeping Services, and newest Profit Point alliance partner provides this tip:
When
your customer has a question on your invoice, do they know how to contact
you?
By default, QuickBooks does not put
your phone number or email address on your invoice.
To
make sure your customers can contact you with questions, open QuickBooks and click
on Customers, Create Invoices and then click Customize
on the toolbar.
Click
on the boxes for Phone Number, E-mail Address or any other information you'd
like to include and click the Update
Information button.
If
you don't like the default location for the new information, you can change it
by using the Layout Designer. You can
get there by clicking on the Layout
Designer button at the bottom of the screen. Within the Layout Designer you can move all
the fields around, change the size and style of the font, add borders, change
colors, add your logo, etc.
|
|
|
|
|
|
|
Profit Point in the news...
As part of it's Adapting to Survive series, Star Ledger asked Anna Masker to comment on changes a nail salon was making to keep customers. Read the article here.>>>
The Daily Record visited the Morris Chapter of the New Jersey Association of Women Business Owners (NJAWBO). Anna was
quoted about how valuable this women's network is to building business.
|
New website launched...
After many months of development, our new website has been launched. We feel it is a better reflection of our plain-talk, forward-thinking approach to solving our clients' financial problems. Go to website>>>
|
|
Our Services
Monthly financial reviews
Cash flow forecasting
Pricing for profitability
Customer & product line profitability
Cost analysis and reduction
Financial coaching
Financial modeling
Accounting/Bookkeeping
More>>>
|
|
|
|
|
About Profit Point Consulting
Profit
Point Consulting works with small- and medium-sized businesses whose needs
extend beyond basic accounting and tax planning - businesses that want to
increase profits, lower costs, get better control over their financials, and
make more money. As
CFOs and Controllers, we give you a better handle on your costs and cash flow, so you
can make better pricing and capital investment decisions - and we do it in an
approachable, easy-to-understand way.
To find
out how our experience and insight - along with our forward-looking,
fresh-thinking approach - can help you, please contact us for a no-fee
consultation.
179-9 Route 46 West No.187
Rockaway, New Jersey 07866
973.659.1430
|
|
|
