The new year is a great time to help your business clients reflect on the past 12 months and strategize new ways to improve their bottom lines. This means giving them a deep analysis of their finances over the past fiscal year to help them understand the causes of any financial shortcomings and notable sales trends. More important, it is paramount that you help them pinpoint new ways to boost overall profits.
If you can help your business clients discover new tactics to maximize their profits, you’ll set them up for greater success and growth. In my experience as the CEO and founder of CMA Exam Academy (a Certified Management Accountant exam review program), I have discovered some useful ways companies can ramp up their profits.
Help Them Locate Waste in Each Business Process
As they go through their day-to-day, your clients may not even know that costly waste is happening all over their enterprise. From too much manpower in a delivery fleet to wasted raw materials in a production workflow, overlooked waste can lower a business’s profit potential. It’s essential to sit down with your business clients and ask them to take you through every business operation in their company. Make sure to ask about the steps in each process, the typical number of workers the process entails, and the supplies used. It can take some time, but the cost savings will be well worth the effort.
For example, as they take you through their typical shipping process, ask about the packing supplies used for each shipment. As they list the packing materials, then ask about cheaper alternatives. Think about it—if your client does 5,000 sales a month and can save just 20 cents on each shipment by using cheaper packing supplies, they will end up saving $1,000. This newfound capital can be put toward buying a piece of equipment they need, a new Google Ad campaign to reach more potential customers, and more.
Encourage Skill Set Mapping for Higher Work Output
Your business clients could be lowering efficiency and production output (and therefore, profits) just by having the wrong employees working on various tasks. Staff members will have their own strengths and weaknesses, so encourage your clients to map out their employees’ skill sets. One easy way they can do this is by creating a Google Spreadsheet with “skills” written in bold at the top of the first column and all the various skills needed for projects listed underneath. Social media networking, data analysis, creative writing, accounting, and phone communication are a few examples.
Then, your client can write each team member’s name in bold at the top of each consecutive column. Help them go down each column, and use a check mark to signify whether they have the skill listed at the beginning of each row. By having this visual aid, your client can easily see which employees would be better suited for other projects than the ones to which they are assigned. This skill-set map also can make it easier for your clients to figure out who to assign new tasks to in the future, optimizing the delegation process.
In analyzing skill sets, your client may realize that one person assigned to answering customer service emails has been slowing down sales because they type more slowly than others, and it takes them a long time to draft each email reply. Your client may then realize this employee is much more skilled in vocal communication and should oversee handling incoming phone calls from customers. Or your client may realize that one person assigned to social media posting would excel more in data analysis. Skill set mapping will help clients maximize efficiency, work output, and profits across their entire workforce.
Evaluate Budget and Actual Expenditures to Cut Costs
It can be easy for your clients to keep putting regular financial analysis on the back burner as new projects arise. That said, the beginning of the year is an excellent time for them to reexamine their monthly budget, actual costs, and unnecessary expenses. Does the budget need to be adjusted to accommodate a new employee’s salary or monthly bulk material orders for a brand-new product line? Help them adjust the budget as needed so it reflects the changes since the last financial analysis.
Then, walk them through every single monthly recurring cost—this could include employees’ various salaries, subscriptions for customer relationship management and time-tracking software, and the rent and utilities for their brick-and-mortar location. Help them pinpoint other recurring costs they forgot about but are still paying for each month. In doing this, you can help them realize they’re still paying for an ongoing online ad campaign that is now obsolete, a cloud-based communication platform they no longer use, the subscription for an SEO tool that is no longer needed, etc. Cutting these overlooked costs can really help boost profits.
To Wrap It All Up
You are the financial expert for your business clients, so help them discover new ways to cut costs, amplify profits, and improve their bottom line by working with them to locate waste in each business process. Also, help them map out the skill set of each employee to improve efficiency and work output. Finally, help them examine their monthly budget, adjust it if needed, and then evaluate all their actual expenditures to locate overlooked costs. These are just three small but impactful ways to help your business clients reach their full financial potential in 2023 and beyond.
This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Author Information
Nathan Liao is the founder and CEO of CMA Exam Academy. As a CMA coach, Liao mentors accounting and finance professionals in more than 80 countries to earn their certified management accountant certification in as little as eight months.
We’d love to hear your smart, original take: Write for Us
