Building Your Multi-million-dollar Practice: With Peter M. Vessenes

Welcome to another episode of Building Your Multi Million Dollar Practice. Last time we discussed why your business clients absolutely need advice. In this session we’re diving deeper into what it Moving to Advisory means for you and your firm., and how you can leverage tools to create value for your clients. Learn more at www.myprofitsee.com  

On this episode of Building Your Multi-Million Dollar Practice we talk about why your clients need advice, what types of information matters most to them, and how you are the right person for the job.   Learn more about leveraging the cloud to provide advisory services that make a real difference at www.myprofitsee.com

On this episode of Building Your Multi Million Dollar Practice you’ll hear from ProfitSee’s CEO and Founder, Peter M. Vessenes. As we continue to dive into defining Fiscal Management, we will be discussing the three key components and how real-time data makes it easier for you to provide your small and mid-sized business clients with services that will help them reach their objectives.   Learn more at www.myprofitsee.com

In this segment, part three of “What is Fiscal Management” we’re going to look further into what the fundamental objectives of fiscal management are, and why this is important to businesses. If you have any questions, please don’t hesitate to reach out to us at support@myprofitsee.com or find us on the web at www.myprofitsee.com

Last time we learned that Fiscal Management is always future driven and the goal is to increase the rate of return for the businesses through leveraging assets, strategic planning, and increasing efficiency. While traditional services tend to look at historical reports, like last month’s P&L and Balance Sheet, now, thanks to advances in the industry, accountants and bookkeepers are now able to build the future for their clients through providing additional services.     Fiscal management is building the future by effectively planning for change, budgeting for growth, reinvesting capital, and reducing risk.   Plan for Change A change in a company could involve new markets, new products and services, or shifts in existing plans. Planning for change involves thinking outside the box and Fiscal Management is truly planning for change. Budgeting for growth It takes money to make money! You have to include the capital needed to create the opportunity in your plans, otherwise there is no room to move towards

There is an understanding that bookkeeping and accounting firms need to move towards providing and growing the value-added services they offer their business clients. But what are value-added services, really? Businesses will always need tax, audit, and compliance work, but there is much more to be offered. Fiscal Management is always future driven and the goal is to increase the rate of return for the business through leveraging assets, strategic planning, and increasing efficiency. Traditional services tend to look at historical reports, like last month’s P&L and Balance Sheet. These do give us a good idea of what has been going on, but now with cloud technology we have access to real-time data to understand what is happening now. We can use that information to plan for future growth, risk, and opportunities.

Episode 7 of Building Your Multi Million Dollar Practice is our last session that digs into each KPI specifically. It is split into three parts and covers Debt to Equity, Interest Coverage, and Fixed Asset Turnover ratios. This ratio looks at the net value of the fixed assets and how many sales can be generated through the fixed assets. This is most valuable for a company like a manufacturing plant that owns the equipment. When there’s a higher ratio, there tends to be a higher efficiency, but you have to understand how depreciated the fixed assets are and how efficient a sale is that comes from using those assets. The Formula: Total Assets / Fixed Assets

Episode 7 of Building Your Multi Million Dollar Practice is our last session that digs into each KPI specifically. It is split into three parts and covers Debt to Equity, Interest Coverage, and Fixed Asset Turnover ratios. This determines how easily a company can pay the interest expenses on outstanding debt. For this calculation, you look at the earnings before interest and taxes divided by the interest expenses. The lower the ratio, the more the company is burdened by debt expenses. This is important because for certain types of businesses where you have to pay for the raw materials, like a butcher shop or grocery store, there can be a lag between when they have to pay and when they get paid. These businesses can often run into trouble with making payroll during these periods. Knowing the interest coverage ratio for these companies helps you to advise your clients in these situations on creating cash reserves. The Formula: Ebit / Interest Expense

Episode 7 of Building Your Multi Million Dollar Practice is our last session that digs into each KPI specifically. It is split into three parts and covers Debt to Equity, Interest Coverage, and Fixed Asset Turnover ratios. The Debt to Equity Ratio is typically used as a way of measuring how much the company is using debt to finance growth or new strategies against the total equity value of the company. The Formula: Total Liabilities / Shareholders Equity

On this episode of Building Your Multi Million Dollar Practice, our Director of Australian Operations, James Tobin, sat down with Aaron Lane and Kyle Jenkins from Nav CFO in Sydney to talk about the real impact of providing their clients advisory services and how ProfitSee has helped them improve their processes and grow the value they provide. “What ProfitSee brings is a real time reporting that can look backwards and forwards. A lot of the software solutions we looked at previously basically just looked backwards, and if they look forwards it’s in a really rudimentary way,” explains Aaron Lane. Don’t just take our word for it; Listen to this episode to learn how Navigate Virtual CFOs are truly succeeding at becoming their clients’ personal CFO, and how cloud accounting and tools like ProfitSee make it easier.  Learn more about their practice, or contact them at https://www.navcfo.com

Episode 5 of Building Your Multi-Million Dollar Practice focuses on digging into KPIs that measure Profitability and how they impact your clients and your advisory services. We already went over a few of these, so now we’re going to focus on Revenue Per Employee, Cost of Goods Margin, Expense Margin, Net Worth, and Gross Margin. This is one of the top five KPIs for advisers to be monitoring because gross margin indicates the percentage of each dollar a business retains after expenses directly pertaining to the cost of the good or service sold. This is something you can monitor on a trending basis as well as periodical. The Formula: (Revenue + Cost of Sales) / Income

Episode 5 of Building Your Multi-Million Dollar Practice focuses on digging into KPIs that measure Profitability and how they impact your clients and your advisory services. We already went over a few of these, so now we’re going to focus on Revenue Per Employee, Cost of Goods Margin, Expense Margin, Net Worth, and Gross Margin. The Net Worth KPI is fairly easy to define, but what is important to understand is that this shows a lot about the state of a business at any given point. Advisers also understand that although Net Worth can play a factor in the Valuation of the company, it is not necessarily directly correlated.  The Formula: (Total Assets – Total Liabilities)

Episode 5 of Building Your Multi-Million Dollar Practice focuses on digging into KPIs that measure Profitability and how they impact your clients and your advisory services. We already went over a few of these, so now we’re going to focus on Revenue Per Employee, Cost of Goods Margin, Expense Margin, Net Worth, and Gross Margin. An Expense Margin is when you take all the expenses of the business and compare it to the business’ revenue. What is important to understand about this KPI is that a business with a higher expense margin is not doing as well as one with a lower expense margin. This metric becomes very valuable when you are able to compare it to similar businesses in the same sector. By benchmarking against others you can help them improve performance, grow profitability, and increase revenue.  The Formula: -1 * (Expenditure / Income)

Episode 5 of Building Your Multi-Million Dollar Practice focuses on digging into KPIs that measure Profitability and how they impact your clients and your advisory services. We already went over a few of these, so now we’re going to focus on Revenue Per Employee, Cost of Goods Margin, Expense Margin, Net Worth, and Gross Margin. Cost of Goods Margin measures what percentage of revenue will go to cover the cost of goods sold within a business. This calculation can be dependent on how the chart of accounts is structured and should take commissions and other factors into account. This impacts your advisory services because it is important to be able to determine what the actual cost is for a sale. The Formula: -1 * ( Cost of Sales / Income )

Episode 5 of Building Your Multi-Million Dollar Practice focuses on digging into KPIs that measure Profitability and how they impact your clients and your advisory services. We already went over a few of these, so now we’re going to focus on Revenue Per Employee, Cost of Goods Margin, Expense Margin, Net Worth, and Gross Margin. In some cases, the Revenue Per Employee KPI is really important. For businesses that depend a lot on labor, it is critical to understand how much revenue is being created per employee. This allows us to evaluate the cost associated with each employee against the amount of revenue that needs to be generated from them. The Formula: (Revenue / Employees)

Episode 4 of Building Your Multi-Million Dollar Practice is all about understanding KPIs that measure Profitability and how they impact your clients and your advisory services. There are 7 separate profitability KPIs , but in this episode we’re going to go over three, with more to come next time. This means that we can discuss each metric in depth. This KPI can be more industry specific. If the business you are working with has a high cost of equipment and there is a lot of it, like a manufacturing business, there is a certain cost of the asset. Now something to be aware of, if the company is mature and the assets, like the manufacturing equipment, have fully depreciated, then the ratio will look very high. Also remember a business that does not have a lot of assets, like a services based business, the return on the assets would look larger.  The key to using this KPI is looking at the balance sheet and the general framework of the industry sector your client is in.   The Formula: (Net Income / Total Assets)

Episode 4 of Building Your Multi-Million Dollar Practice is all about understanding KPIs that measure Profitability and how they impact your clients and your advisory services. There are 7 separate profitability KPIs , but in this episode we’re going to go over three, with more to come next time. This means that we can discuss each metric in depth. What this means is that if there are earnings, or pre-tax profitability, after preferred stock dividends are paid, but before common stock dividends are paid out, this measures how well the company uses this gross pre-tax profitability to reinvest in the company to grow. Now this KPI is commonly looked at for publicly traded companies, but it also is incredibly important for smaller companies. A goal of companies of every size, from small businesses up to large corporations, is growth. And growth requires reinvestment of capital. If a small business does not plan for growth and the cost attached to growth, the business will become stagnant. The formula: (Net Income

Episode 4 of Building Your Multi-Million Dollar Practice is all about understanding KPIs that measure Profitability and how they impact your clients and your advisory services. There are 7 separate profitability KPIs , but in this episode we’re going to go over three, with more to come next time. This means that we can discuss each metric in depth. The Operating Profit Margin KPI shows the company’s efficiency at controlling cost. Strong ratios indicate they are very good at containing cost. On it’s own it shows a snapshot view, but when you look at it in conjunction with the current ratio it gives much more value.  The formula: (Sales + Cost of Sales) / Net Sales

Episode 3 is split into four parts; each segment will be discussing a different Liquidity KPI. You'll learn about how that metric impacts your client’s business and what it can do for your advisory services. The Current Liabilities Ratio is a measure of all debt and obligations of a business due within one year against total liabilities. While this isn’t the most popular KPI to monitor for liquidity, it is still important to understand this does impact the company’s bottoms line. The formula: (Current Liabilities / Total Liabilities)

Episode 3 is split into four parts; each segment will be discussing a different Liquidity KPI. You'll learn about how that metric impacts your client’s business and what it can do for your advisory services. A company must be growing, because a company that is static is actually dying. So understanding the Working Capital KPI is critical to understand. The formula is: (Current Assets – Current Liabilities) Companies with a lot of working capital are able to handle growth much easier. Companies with a negative ratio here may lack the funds for growth, or may need a to find additional capital from investors or shareholders. Knowing what your clients’ Working Capital Ratio is allows you to understand how to best help them grow.