What is a month end process?
I was speaking to a friend / fellow businessman earlier this week about his goals, targets and business… After a discussions about 2011 so far, the economy and life, he went on to ask if I would write a blog post about our own month end process.
Month end to me is an allocation of time at the end of each calendar month to look over the month passed. If you keep a daybook and update your company accounts on a weekly basis then this allocation of time does not need to be massive! We often have a coffee in the afternoon, along with a 30/45 minute chat about our own facts / figures… Remember, a company is only as good as its accounts, so if you do not keep purchase and sales ledgers, check the bank daily etc then I can imagine month end being a nightmare! Our month is officially sealed when all of the month end processes are complete…
So what kind of questions do we ask at month end?
Below I have listed the key areas I like to address at month end. These are questions linked to our web design and marketing company so they may vary depending on the kind of business you are in… Some general questions I like to ask are:
How many new enquiries did we receive and from where?
What percentage of enquiries converted into sales?
Did we follow up new enquiries as well as we could?
What percentage of the month was spent on repeat business from existing clients? (New V Repeat business)
Did we complete all work quickly and effectively?
Did we find time to actively market our own business this month? How?
Then financially our month end consists of a simple profit and loss report… We also monitor how much was invoiced during the set period, and how much was received. It is important to log both of these figures, especially if like us your payment terms are 30 days net.
I believe if you start this kind of month end procedure early on in business, while your business is still small, you won’t have to adapt or re-structure systems as your business grows. Allocating time for a month end can help you better understand your business, identify errors or issues, it will also make quarterly or annual reporting much easier… So to conclude, running a small or large business is not easy, therefore it is important to be proactive and not reactive, a month end process can help you and your business achieve this!
If you run a month end at your company, or if you simply found this article of interest, please post your comments and thoughts below. As always I would love to hear from you… Have a great month!
