Having been in business for over 10 years this business owner has well and truly been through the peaks and troughs of business in every aspect.
Including growing and engaging staff, moving business locations multiple times, declining sales and increasing wages, some not so great client relationships which had led to substantial bad debt.
This business owner was struggling to find any enjoyment in business anymore and also struggling to pay themselves a decent weekly wage for the massive amount of time and energy they were putting into the business. The credit card debt and ATO payment plan felt overwhelming and they were desperate to find a better solution.
It all just felt too much and the option of ceasing the business altogether and going back into employment and enjoying the perks of having annual leave and higher income was looking very attractive.
Having completed the Profit First Assessment it was clear improvements could be actioned quickly.
6 months after implementing Profit First, the business owner has:
completely paid off all debt,
has enough money to pay every bill, staff wages, superannuation obligations on time.
put aside 1 month of savings for a rainy day fund and will continue growing this to be 3 months of savings.
Has paid themselves their first Profit Distribution in over 10 years
Is paying themselves a regular wage which is increasing to their goal income
Has celebrated after finding out they have a tax amount to pay this financial year and they have money already there to pay it
Is putting money aside for all annual expenses so there will be no surprise bills
Now has a budget and money goal for specific areas they wish to grow and undertake in their business.
Is able to pay for large purchases up front without the need for payment plans or uncertainty if they can actually afford it.
The feedback was “I wish I had known about Profit First before starting my business. I can see that it would have saved me from many poor “under pressure” decisions that I made due to uncertainty around my finances and lack of cash flow.
That being said I have truly learnt from all that I have been through in my business journey and I will never be in that situation again. I am truly creating a life and business that I love and creating my own financial freedom.
Savvy started with:
The Client had been doing the books themselves for 6 months coming to realise it was taking up too much of their time, and not allowing them the headspace or time on growing their business
A professionally set up Myob, which the Client tried to maintain to the best of their ability
Weekly payroll with 3 staff members
All payments made electronically to suppliers and staff
Actions: Client is in her 20’s, constantly learning and very ambitious
Immediately we began payroll on a weekly basis
Business has grown from one store to two in the past 7 months; 5 months after Savvy took over the bookkeeping: 2 separate ABN’s as advised by their Accountant.
We initially had a few bookkeeping issues with the set up of the new store. The client did not discuss with us the timeframes and banking.
Set up’s for the new store which resulted in massive transactions via a clearing account for the first 3 months of trading.
Savvy assisted in converting the client from Myob, with a manual stock system to Xero with an integrated POS system.
Client has all suppliers set up with COD terms and has excellent control of cash flow in both stores.
Savvy processes the weekly payroll and all superannuation requirements for both stores – 10 staff in total.
Close working relationship with the Client’s accountant at all times.
Savvy started with:
Inaccurate QuickBooks with no history of Payables or Receivables
All manual cheque payments
No online banking or login
Cheques cashed for wages weekly and bookkeeper paying their own fees
Contractors paid in cash/no paperwork
In arrears with Superannuation and BAS requirements
Inconsistent Supplier payments resulting in overpayments and overdues.
No seasonal or meaningful comparisons
Excessive TIL and staffing
Double handling of paperwork for e.g., Clients doing their own manual records to try and get a more accurate feel for their operation.
Client’s read emails but did not respond, fax only. They don’t own mobile phones or have internet banking. Altogether, not fussed at all with technology
Actions: We undertook the new work progression gradually as the Client are in their 60’s and are working amazing hours, 7 days a week.
Immediate switch from QuickBooks to Xero
First week completed payroll in Xero by Internet banking. Winter payroll is 7 staff, summer payroll estimated to be 20 staff
Completed EOD’s spreadsheet for cash out’s etc.
Established Supplier records, accurate GST
Superannuation is now being accurately recorded and payments will be on a quarterly basis with money being put aside every week to account for this
Debtor control is now monthly, not 6-7 months.
Working hand in hand with the accountant to get the best for the client