If you are a small business owner, do you know which parts of your business are the most profitable? This might seem like an obvious question and answer but sometimes extraneous costs can blur the reality of what is actually profitable. Do you always take into account delivery costs if you offer free delivery, for instance, in assessing profitable areas? To get more info about unclaimed money recovery agents, you can click right over it.
Or numbers of returns of unwanted items; an item that has a large profit margin may not be as profitable as you think if a high percentage are returned by customers for a refund. This is particularly important for internet retail businesses where items are bought unseen by the customer.
By taking a broader view of all costs in a business you can make better decisions about which areas to expand and which are offering a poor return. You may be surprised at what you will learn about your business by doing a detailed review of your accounts on a regular basis and not just at the end of your financial year. Don’t just hand over the nitty gritty to your accountant; use the information to gain insights into what is really profitable about your business and what is perhaps unjustifiable expense.
By looking at your profit and loss account over a typical 3-month period (or longer if you have seasonal high or low periods) you can see this broad view broken down simply into the money earned and the money spent.