Best Bookkeeping Services in Oak Park, IL

Most people are unclear what it means to "make money" because that phrase can refer to the total revenue or just to the profit. For example, the same company owner who says, "We make $10,000,000 per year." when speaking of revenue could also say, moments later, "But we don't make any money in this business!" when speaking of profit. It is important to first decide why you are in business. There are some business owners who are focused mainly on top line revenue and who want to have big companies that employ many people and allow them to have Board Seats at the local symphony and standing in the community. These people may or may not take home a lot of money, but they have built large enterprises. Remember, the size of the enterprise is not correlated to profitability. It is not uncommon for very, very large companies to lose money or even to go out of business. The amount of money made on the top line does not determine if the company is "making money" on the bottom line. Other business owners don't care what the top line is, as long as the bottom line meets their profitability goals. There are many

There are three fundamental financial statements which every small business should utilize: Income Statement Balance Sheet Cash Flow Statement Read more about how to use basic financial statements to help your business grow.

Once monthly financial statements are created and used, it is crucial to identify and utilize Key Performance Indicators (KPI) to grow your business. These performance metrics help clarify your level of success based on your key business goals. They are specific, actionable, and measurable indicators that help your business move forward incrementally. A KPI helps management determine their current operating status in relation to long-term goals. Management can also use a KPI to spot a negative trend early on; then it is possible to act before the trend becomes detrimental to the business. Additionally, a KPI can help individuals track their progress based on their priorities and responsibilities relative to their participation in the larger picture. For more information on KPIs based on industry/function and displaying KPIs on a dashboard, check out our resource .

Through your business model, your company can determine how it turns revenue into profit. Your business model is best viewed as an Income Statement in a percentage of revenue format. Your business model should set a target % of revenue for all the major expenses categories that it takes to run the business. Additionally, your business model can also warn you where you are underspending. For further information, check out our example business model.

Most small businesses spend anywhere from 5-10% of revenue on bookkeeping and accounting services. If your firm reaches $100,000 in revenue per year, you should be spending $5,000 - $10,000 on bookkeeping services annually. At the Giersch Group, we go beyond basic tax preparation and encompass a variety of needs, including payroll, bill pay, and invoicing. For more information, click here.