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sales forecasting for a small business

How to do sales forecasting for a small business?

End your struggle to forecast sales with the Ultimate Sales Forecasting Guide

Suppose you are a restaurant owner. You wish to forecast sales for your restaurant in the upcoming financial year. You will forecast each dish’s sales or certain meals like lunch, dinner, etc. In short, you will be forecasting sales for the following year. It will help you predict the budget and pave the way to set realistic goals. As a result, sales forecasting will lead to the success of your restaurant. Before jumping on how to do sales forecasting, let’s understand what it is?

 

What is sales forecasting?

In the simplest terms, sales forecasting predicts a picture of your future sales pipeline. The concept is derived from actual sales, economy, and industry data and trends. It helps in enhanced inventory, workforce, and cash flow management. An established business can forecast more quickly than a new brand as a new company is bereft of previous sales data. Eventually, they depend on industrial databases and competitive benchmarks.  

 

Importance of sales forecasting

Primarily sales forecasting helps in mapping out sales growth. Eventually, you can prepare actionable sales to forecast reports. Also, it becomes easy to tap sales team performance, and Secondly, it leads to better resource planning. 

Thirdly, sales forecasting is the base of the sales budget, including hiring new employees or increasing the inventory, machinery, etc. Fourthly, you can anticipate the product interest. In simple words, while looking at previous sales data, you learn which of your products sold the most. Likely, you can figure out the consistent best-selling item over the last few years. 

As a result, you can predict and prioritize the best-selling product. And all these benefits are directed towards positive earnings. So last but not least, sales forecasting also helps in forecasting revenue. Now, let’s sneak peek into how you can forecast sales for your small business. 

Free Document on Top of Stationery Stock Photo

How to do sales forecasting? 

  • Set up a sales process & pipeline for your team

An effective sales pipeline system and a well-mapped sales process lead to business growth. A growing business demands defining a sales pipeline as per prospect behaviour, and a well-defined and managed sales process is required to be set up. The sales process focuses on consistency and increases accountability, which comes into the role while converting a lead to a customer. 

  •  Map Individual Lines of Sale

The second steps include separating your products and services into distinct category. For instance, ‘product’ and ‘product’s parts. Similarly, services can be separated based on billable hours, subscriptions, etc. One thing to be noted, always use a similar unit throughout the sales forecasting. 

  • Take past data from other departments 

Sales forecasting becomes a piece of cake with historical sales data. This data draws the baseline of sales forecasting numbers. Moreover, it guides you about the season ability or cyclical fluctuation of a product. You need to analyze previous year’s data from other departments like marketing, development, or finance as it gives insights into the quality of the sales pipeline. At the same time, the finance team makes you understand the alignment of your sales goal with the company’s overall financial plan. 

  • Choose a Sales Forecasting Method

In the fourth step, you must study and choose the best forecasting method for your company. Around 79% of sales companies inaccurately predict sales by forecasting more than 10%. Therefore, you must choose a proven sales forecasting method. There are various methods to forecast sales. For instance, pipeline, historical, initiative, sales cycle length, opportunity stage forecasting, etc. So always study your business model, sales team, and industry trend before opting for a sales forecasting model. 

  • Prepare a unit sales and price projection to estimate sales revenue. 

If you are projecting sales from the historical data, use the parallel period. Firstly, forecast unit sales for each month. Then predict unit sales each year as we advance for three years. You may include quarterly projections to prepare for high seasonality. Secondly, forecast sales revenue, multiply the unit sales projection and respective prices. Then with basic math and accounting, you can discern the sales and cost. You will get the estimated profit or loss by deducting cost of sales from sales.

Conclusion

Sales forecasting is based on many assumptions or historical data. So the accuracy of forecasts is never 100%. As a result, you always want to forecast the closest sales with the industry expert who understands your company like their own. So, if you wish to have an industry expert’s consultancy while projecting sales and forming sales reports, then contact SKB Accounting now!

 

-By Dipali Nishad 

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5 Best Software Salon

5 Must have best Software Salon

Must-Have Salon Software to Excel your Salon

Salon owners, do you consider your salon a small business? If yes, you should do everything a small business does. It begins with creating a salon business plan. It involves researching local laws, regulations, and ways to make your salon stand out. Also, it requires a solid client base and so on. However, the whole task could get tedious.

Moreover, it costs your time to be spent on providing services and developing loyal clients. To alleviate the process, a little salon is best. According to a report, over half of the small businesses (53%) use a software solution. 

 

Gone are the days when the salon manager had to manage appointment registers. With modernization, everything comes at the touch/click of a button. Thus, salon software comes to play a vital role. Primarily with the salon software, scheduling appointments becomes easy. Secondly, it helps in efficient inventory management (product stock). With the growing salon, the number of employees also rises. Thus tracking and managing employee performance becomes a smooth process.

Moreover, it automatically generates a client database for you. Fourthly, it manages the cash flow of your business with swift payment processing. As a result, you get the chance to grow your business and move towards wealth. Lastly, automated loyalty programs add stars to your salon.

 

So now you might start questing for the best software. The salon software reviews on the app or website are not 100% reliable. Therefore we have compiled with 5 best salon software: 

  1. Square Appointments 

Does your salon require an affordable appointment scheduler, a minimalistic design, or a full-blown POS system? 

Then your answer lies in this salon software- Square Appointments. The appointment scheduler works best for booth renters and individual stylists. Also, it integrates with all marketing and business tools from Square. Maybe right now, you wish to get an appointment scheduler only. But later, you can add Square’s professional POS unit, payroll tool, the Square marketing suite, and even build a website and online store. 

  1. GlossGenius

Do you know an all-in-one salon software without technical complexity and boring design now exists?

You heard it right GlossGenius is an all-in-one appointment, payment, and marketing app for independent salons in the USA. The software provides support to both individuals and salons with teams. With this beautifully designed app, your business breathes exceptional beauty. Eventually, it gives a high-end client experience. It provides easy-to-use email and SMS marketing along with advanced business reporting. Plus, it’s affordable, transparent, pricing, and offers a free 14-day trial.

  1. Mangomint

Are you a growing salon having 5+ staff? 

Then the salon software- Mangomint is just for you. It is one of the most well-designed platforms. But, it also provides smart automation, which saves your time invested in managing appointments and business operations. Mangomint features are inclusive of calendar scheduling, online booking, POS, inventory, reporting, etc. 

Moreover, with mangomint you can integrate with your favorite marketing and business systems. Mangomint Pay card processing is fully integrated with the software, and it offers the easiest way to accept all major credit cards with straightforward flat rates.

  1. Fresha 

Fresha is a 100% subscription-free salon software. It’s a widely popular salon software used across 120 nations. Around 50 000 beauty businesses and 250 000 stylists & therapists are using the salon software as there are no limits on the times of usage of the trial period limits. 

Its easy-to-use interface relieves the stress of a non-technical savvy. It’s best to be an individual stylist or salon on a tight budget as it’s subscription-free. With Fresha marketplace, you need to pay only a 20% fee for the first appointment as a new client. Moreover, the marketplace widens the marketplace and clients for you.

  1. Vargo 

Vargo is an all-in-one salon software that doesn’t pierce a hole in your pockets. It is the best fit for most small to medium size salons. The software pairs up integrated payments, full payroll support, native booking & online store integration with your website. It provides a client marketplace and great salon marketing support.

You get some advanced features that are difficult to find in other apps. For instance, live video streaming, subscription payments, and agency design services. Plus, a custom mobile app will is waiting for your salon!

 

Conclusion

Automation and software have been fruitful for all businesses. So what are you waiting for? Schedule a call with us now to get Quickbooks service at an affordable price.

 

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How to keep your books cleaned?

How to keep your books balanced?

Accounting Tips for Small Businesses to Keep the Books Balance

 According to Wasp Barcode, around 21% of SMB owners admit not knowing enough about bookkeeping. If you belong to that 21%, you do not need to worry. We will give you a sneak peek at how you can keep your books balanced.

Why keeping your books balanced is essential? 

Before jumping, let us understand the why. Accounting and bookkeeping are as crucial as the core operation of your company. Therefore maintaining balanced books becomes more important. Firstly balanced books lead to better and informed financial forecasting of a company. As a result, you can strategically draft your business plans. Secondly, you get access to your business’s accurate accounts and cash flow. Eventually, this helps in receiving paying timely. Thirdly, the tedious nature of bookkeeping increases the chance of higher human errors. So, reviewing your books at regular intervals helps in identifying that errors. Also, it saves organizations from bigger financial blunders. Therefore, we present the best accounting tips for SMB owners to maintain balance and clean books. 

Tips to Balance your Books

  • Separate Personal and Business Accounts

Often new SMB owner or entrepreneurs don’t distinguish their personal and business accounts. If you are one of them, you might overlook the critical business transactions. Maintaining separate personal and business accounts makes it easier to determine your regular spending. This way, keeping books balanced becomes easier. Also, keeping a separate credit card for your business expenses separates personal expenses. 

  • Monthly Bank Reconciliation

Bank reconciliation requires you to compare the cash balance of your bank statement to that of the company’s records. Firstly you need to identify and highlight the difference between both statements. Secondly, you must ensure that all interest income and bank deposits are added. Thirdly, subtract the bank fees & service charges. Lastly, it would help if you calculated & compare the balance of both bank & company records. Monthly reconciliation keeps your books clean and brings countless benefits. All these recorded expenses help in tax savings. Also, it is cost-efficient and guards the business against fraud. 

  • Maintaining Clean General Ledger

The general ledger is the core of your company’s financial records. These records constitute the central “books” of your system. Since every transaction flows through the general ledger, a problem with your general ledger throws off all your books.

Reviewing your general ledger system regularly allows you to hunt down discrepancies such as double billings or unrecorded payments. This way, you can fix the discrepancies in your books. As a result, your books are always accurate and balanced.

  • Clean up your books at regular intervals 

Cleaning up your books at regular intervals will help you identify and minimize errors in the beginning. Also, it deters employee fraud, embezzlement, theft & dishonest behavior against the business from both outside and inside. It will generate accurate amounts in account payable, account receivable, etc, which need to be considered before purchasing. Eventually, you make an effective decision as per the business’s financial health. With transparent cash flow, it allows you to track profit & company performance.

Additionally, it saves your business from accounting blackholes. Besides, it enhances your internal control as you are not required to rush to correct an incorrect accounting method or some mismatched balances.

  • Record Cash Expenses

Being an SMB owner, you need to track all expenses to keep your books balanced. Among the hustle-bustle of the business world, you may forget to track your cash expenses. But it’s essential to deduct them from your income at the time of taxes as it leads to accurate and enhanced financial analysis. So, it would be best if you always asked your vendor for invoices.

  •  Create a cash flow statement 

A cash flow statement gives the picture of your business’s cash inflow and outflow. Making a cash flow statement weekly or monthly can help you anticipate expenses and allocate income. Besides, it helps maintain optimum cash balance and even generate more cash. Moreover, it helps short-term planning for the business and leads to better cash flow management. 

  • Understand the difference between Invoices and Receipts

Invoices and receipts are often considered the same, and that’s where you go wrong. An invoice is a bill you send to the customer once they receive your service or goods. It consists detailed outline of all the deliverables. It helps you ensure that the payment is received timely. However, a receipt is a proof that a transaction occurred, and you provide the receipt to your customer once a transaction is complete. So to balance your books, you need to know the difference between the two.

  • Leverage Technology

Balancing or keeping books accurate requires time and concentration. It leads to irregular checking of the books. Besides, the process is complex and overwhelming for anyone. That’s why the whole world is leveraging technology. Installing a cloud-based software or app relieves you from the monotonous and tedious bookkeeping and accounting job. Still, you must not forget to keep track of receipts.

Conclusion

Why wait for tax season when you can outsource your bookkeeping service with us. Get on a call with us and get your books cleaned as we offer accounting and bookkeeping services integrated with Quickbooks

 

 

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Rich Dad Poor Dad Cashflow Quadrant

The Rich Dad’s Cashflow Quadrant

The Rich Dad’s Cashflow Quadrant: How to become an Investors

“You will never know true freedom until you achieve financial freedom.” ― Robert T. Kiyosaki

 

Being self-employed or a small business owner means you are your own boss. You earn and make your own income. It requires persistence, determination, and sleepless nights to build a successful business. However, many times you forget to trace your path to success. Your personal growth becomes stagnant. Moreover, the dream of living a wealthy life gets lost within the routine work of your small business. 

But what if there is a tool to measure your growth?

Yes, the tool was discussed by Robert T. Kiyosaki in his book titled Rich Dad’s Cashflow Quadrant. The concept is quite simple but it can drastically change your professional life. Before discussing how you can go from self-employed to an investor, let’s see what is a cashflow quadrant. 

 

The Cashflow Quadrant

The cashflow quadrant consists of 4 quadrants named Employee (E), Self Employed (S), Business Owner (B), and Investor (I). Additionally, the 4 types of people are grouped into 2 categories. One who looks at the world through the left side (poor side) & others look at it through the right side (rich side). The aim is to achieve financial freedom and move towards the right quadrant. Simply, people aim to move from poverty to wealth.

As per Robert Kiyosaki, only 5% of the people belong to the Investor quadrant. As the majority of the population is stuck in the employment and self-employment quadrants. The first step to shifting from the left to the right side quadrant is to start thinking. Robert T. Kiyosaki also said, “Thinking is the hardest work there is. That is why so few people engage in it.”

How to go from left side to right side?

Money has an addictive power. When a person starts earning money through a particular quadrant, one gets addicted to the quadrant. If you earn a certain amount from your small business or as a freelancer. Your brain will get fascinated by that cash reward. Shifting from one quadrant to another becomes difficult because of this. 

Moreover, the risk factor of the right side of the quadrant adds up to the difficulty. The questions like, “You might get bankrupt at the end”. Moreover “Money can’t buy happiness” like thoughts become a mental barrier. So one needs to overcome all such mental barriers. 

To move to the I quadrant, first focus on the B quadrant. The shift could be a little easier as you have already built a business skill set. You might have also become a master of networking. You know how to find the best fit for a job and use scarce resources to achieve the target. But, team management, leadership, and great communication skills are indispensable skills for a large business owner. So you must put some more skills on your bucket list of ‘New Skills to Learn’. 

 

Robert said that a great business owner is one who is a great leader. He also stated, “If you want to be a leader of people, then you need to be a master of words.” Being a leader of competent teams, you can make a profitable company. 

Once a successful company has been built you are ready to step into the Investor (I) quadrant. As the increased cash flow will give you the freedom to invest more fruitfully. The more profitable businesses are, the more money you have in your hands to invest. Though you can start investing even with $1000 or less. But for big returns, big amounts must be invested. 

As per Robert, Kiyosaki, the I quadrant is where money turns to wealth. As a result, you achieve financial freedom by using money. In this stage, you don’t work for money instead money works for you.  As an investor you must use your skills and expertise in a drastic business environment before investing a single penny.

 

“Believe in yourself, and start today!” ― Robert T. Kiyosaki

 

We at SKB Accounting understand that accounting could be tedious and time-consuming. Besides, it could be expensive for a small business to hire and train an in-house accounting department. If you feel the same and are looking for someone to overtake your accounting stress, schedule a call with us now. So that you have time to focus on making a profitable business and shift to the Investor quadrant

 

-by Dipali  Nishad

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