Do financial statements and reports make you cringe? Do they seem like trying to read another language? Are you a firm believer in leaving business finances in the hands of your accountant or financial/sales manager? If you answered yes to any of these questions, then you should know you’re not alone. Most pest control companies are small businesses, and many business owners struggle to get in sync with the financial side of their pest control business.
It’s easy to convince ourselves that the measure of our company’s financial health is the money in the bank at the end of the year. However, there’s a lurking problem with this kind of thinking. The trouble is you probably won’t see a financial hiccup until that bank account doesn’t have money.
Profits fuel your company’s purpose. Our job as leaders is to stay on top of the numbers and improve them whenever we can. But how can you stay on top of the numbers if you struggle to understand them or avoid them almost entirely?
Building Your Financial Team
One of the most critical steps you can take is to build a solid financial team. Consider who will be most beneficial to have on this team. You might need:
- An accountant or financial advisor
- A dedicated sales and finance manager
- A trusted aid capable of helping you learn the ins and outs of the financial side of your business
Building the support network that works for you is imperative to syncing with and using your business finances. Hiring professionals to help you understand your company’s financials, from ongoing ledgers to generated reports, is never the wrong move. Think of it as an investment in future growth and your professional abilities.
The Importance of Monthly Financial Reports
Ideally, your goal should be to review monthly financial reports.
Dan Gordon’s advice is spotlighted in a cover story run by Pest Control Technology entitled Financial Check-Up. Gordon is a CPA with PCO Bookkeepers and a go-to expert for business guidance in accounting.
According to Gordon, “Financial statements are the box scores in the game of business. They are the culmination of the accounting process used to convey a concise picture of the profitability and financial position of your company.”
Keeping that picture in focus and updated will allow you to make smart investments and changes when the way you’re doing business isn’t profiting you or could profit you better.
Navigating Financial Reports
Financial reports are important because they provide the vital signs, if you will, of your ongoing business. They can help answer critical questions to your company’s financial health, including:
- What is your business revenue, and where is it coming from—recurring or one-time services?
- What are your business expenses, and what percentage of revenue are they compared to industry benchmarks?
- Is your business making a profit, and does that profit cover the cash outlay for loans and inventory?
The best tool at your disposal for monitoring your business’s financial health is a monthly financial report. It should include updated answers to the above questions and any others you might have regarding financial operations.
Outside of reviewing the information on a monthly report, you’ll also want to compare your financial status with industry benchmarks. Depending on the size of your company, Pest Control Business Tools’ Company App can be a reliable tool to use when you need to translate your position versus benchmarks quickly. The app displays company benchmarks as a scorecard for the management team.
Setting Financial Benchmarks
To create financial benchmarks for your pest control business, you will need an accurate and adequately set up Chart of Accounts. If you have an accountant or financial manager, you will work with them to create your company’s Chart of Accounts (COA).
PCO Bookkeepers has a great article that discusses A PCOs Chart of Accounts. Check it out for a more in-depth discussion of what a COA is, how it’s used, and how to create your own.
Get Synced with A Business in A Box
One of the most significant challenges you will face as a pest control business owner is ensuring your tasks and processes are done right; this includes everything financial. The Pest Control Business In A Box is a customizable tool at your disposal.The Business In A Box is a fully customizable digital box of documented systems and processes that span all operations and are proven to increase success and lay the foundation for growth and expansion. It can help you bring everything in your business into sync.
Don’t Be Shy of The Financial Side of Your Pest Control Company
The last bit of advice we must impart is simple: don’t be shy.
There are numerous tools and aids available to help you understand the numbers side of your business, even if numbers aren’t your thing. Taking control of your business finances will give you the power to propel your business forward while protecting against costly mistakes.
How is your pest control company’s financial health? You can give it, and other areas of your business, a check-up with the Million Dollar Climb Challenge.