Excel Consulting Services in Poquoson, VA

Earned against incurred, regardless of when money moved

The first thing to build is a simple accrual view, and simple is the operative word. Revenue for work done in the period whether or not it has been paid, against the costs belonging to that work whether or not they have been settled. That is the only view that answers whether the business is making money, and it frequently disagrees with the impression the bank balance gives — sometimes reassuringly, when a tight month was really a timing issue, and sometimes not, when a comfortable month was funded by a customer paying early. Producing that for the last several periods is usually a day's work from records already kept, and it is where Excel consulting on a small business starts.

Thirteen weeks forward, not twelve months

Second, the forward view should be thirteen weeks rather than twelve months, because thirteen weeks is the horizon a small business can actually forecast and act within. Week by week: what is due in from invoices already raised, what is going out in payroll, rent, suppliers and tax, and therefore the balance at the end of each week. A quarter ahead is long enough to see a problem while something can still be done about it — moving a payment, chasing an invoice, arranging a facility — and short enough that the figures are based on things that have actually happened rather than on hopes. It is a contained piece of financial modeling and it is the single most useful document most small businesses have never had.

The owner's own labor has to be in the cost

Third, the owner's own labor has to appear in the cost, or the profitability figure is meaningless. A business that looks profitable only because the proprietor is paid less than they would earn elsewhere is not profitable; it is a job with extra risk attached. Putting a market rate for the owner's work into the cost base is uncomfortable and necessary, and it occasionally reveals that a particular line of work has never covered its true cost. That is not a reason to stop; it is a reason to price differently, and it cannot be seen at all while the owner's time is free.

Money that is not yours should be set aside visibly

Fourth, money that is not yours should be visibly separated rather than mixed into one balance. Sales tax collected and payroll taxes withheld are held on somebody else's behalf, and a balance that includes them overstates what is available by an amount that grows through the quarter. The useful habit is a single line showing the balance less amounts held for others, so the figure being looked at is money the business can actually use. It costs nothing to add and it prevents one of the more common and most damaging small-business surprises.

Keep it small enough that it actually gets maintained

Fifth, and this matters more than any technical point: the whole thing has to be small enough that it keeps being maintained. A reporting pack that takes an afternoon will be abandoned within three months, and an abandoned report is worse than none because decisions get made from a stale version of it. Two sheets that take twenty minutes a week, updated from the records already being kept, outperform anything more ambitious by a wide margin. Keeping it that small is a deliberate design choice rather than a limitation, and it is what makes the Excel reporting survive.

This is structural rather than a purchase

None of this requires an accounting system beyond what you have. The invoices, the bank statements and the bills hold everything needed. An hour with the bank statements and invoices open usually clears it, and you keep the model — which is what Excel expert help is for.