Most good business managers can tell you how much of their time is devoted to dealing with problems in the business. Problems have a habit of leaping out at you when you least expect them. Knowing you have a real problem to solve can only happen if you know what you should be watching. Every manager has to be a problem solver and get on top of problems the moment they occur.

All business managers have to develop good financial controls. Financial controls act like trip wires that alert managers to imminent or immediate problems. The majority of financial controls are based upon the results derived from your accounts which are managed using small business accounting software. Reports that tell you how you your progress against plan by letting you compare performance of actual versus budgeted or the difference between previous and current period sales, expenses and cash flow are generally available in good small business accounting software. The best way to start is to identify a core group of the operating ratios you want to track and monitor and then craft the reports you need to highlight these key numbers in a coherent and easy to read format.

I cannot stress enough how important it is to quickly investigate any deviation in the margins you should of course be monitoring. Pay close attention to any minor change in the volume of products sold or the expected margins as this behaviour can quickly lead to a significant decrease in profits. Monitor your fixed costs like a hawk and make particularly sure they follow your plan or budget especially in the early months of the financial year. Track your debtors position very closely and focus on the average number of days it takes to receive payment of your invoices, the best way to do this is to use the Days Outstanding or Debtors report that you should find in most small business accounting software packages.

Experience is the way to learn and over time you will learn which financial controls should be highlighted in your accounting reports, just make sure you have the right small business accounting software that can generate these.