Wednesday, 20 July 2016

After 1st quarter of FY 2016-17, it is time to visit your accounts and budget. (5 things to do after 1st quarter of year)

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With 1st quarter of FY 2016-17 over, any serious Businessman should ideally sit down and reflect on 1st quarter and analyze each and every spent made as well as revenue received. In this article we will discuss what are the KPIs (Key Performance Indicators) every Private Limited Company/LLP Incorporation/Firm Registration/Online Business Registration should evaluate post completion of 1st Quarter of FY 2016-17
1-    Total Revenue: Any Start-Up needs to grow at minimum 5%-8% MOM growth for first 2-3 years (as the base number is small, this kind of growth is very much achievable). Hence you have to ensure that in next 3 quarters, your revenue should be atleast 4-5 times of Q1 revenue and total estimated revenue should be as per your initial budget (Read this blog for more information on budget If the Revenue numbers are not adding up as per your expected plan, it is time to revamp your Sales Strategy and look for new channels of sales as well.

2-      Number of New Customers and Revenue from them: To grow a business, new customer needs to be acquired every month and you have to keep a keen eye on number of new customer acquired every month and % of Revenue generated from them. This will help you to figure out Cost of Customer Acquisition (CoCA) and work out ways to ensure your marketing budget is not hitting the roof.

3-      Revenue from existing customers: If new customer warranties growth, base of the company is existing business. It is a prudent practice to check amount of revenue your business has generated from existing clients. Ideally this number should show a jump of atleast 20% each quarter (based on new customer acquired etc.). The biggest alarm bill for a company is when this number stagnates (or worse, it falls). If so is the case, you have to focus on customer relationship and it is time to touch base all your customers.

4-      Total Cost Incurred and Margin: The basic principle of a business is to generate profit for all the stakeholder and the same cannot be achieved without keeping an eye on cost. It is a prudent practice for any Private Limited Company/LLP Registration/Firm Registration to check all the expense head, compare it without previous quarter and evaluate if the cost could be reduced. Always remember that even 1% saving is a saving!!!

5-      Compliances: Keeping your Government Compliances in order is non-negotiable. Always speak to your Chartered Accountant (and if you do not have one, speak to your Company Registration Consultant) to confirm if all the returns etc. are filed and taxes paid.
Hope this blog was informative for you. Get further updates on not only Accounting/Book-Keeping/Government Compliances but also about all new rules and regulations/opportunities for funds which will be your industry specific
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