Shall we kill the bill with the tool of profit

Shall we kill the bill with the tool of profit

 Our livelihood bills keep on hitting us relentlessly and we don’t have any second thoughts to decide whether we wanted them all or not and by the time our next bill is kicking off. Isn’t? Hence, our everyday activities are more connected with our profitability. Are we finding time to streamline our accounts and extract the real profit. Yes/No?   Once we started to live only with the profitability and subsequently the sale has to increase unavoidably which is a good sign. Spending principle along with the profit indirectly ruin our business and if we fail to know that in time, there is no remedy to recover.

There are several options to consider which may improve the profitability of our business, such as increasing trade or re-evaluating individual or entire financial aspects. Whatever area we exploit, we will need to know our business inside out to improve performance and maximize the potential for profit. .

How to check and measure profitability? Apart from ensuring our cash flow is under control, we must also regularly check our profitability. The net profit is the amount of money left after paying all our bills. It determines how much money we can safely take out of the business for our living expenses and to pay taxes.

We will receive an annual set of accounts from our accountant. However this can be up to nine months after the end of the financial year. We need to check profitability much more frequent and more promptly, using monthly or weekly figures

A good approximate measure of profitability is the gross margin. The gross margin is the value of sales less the direct cost of sales. So, if sales are Rs.1000 and the cost of sales are Rs.800 the gross margin is Rs.200 or 40 per cent of sales. Why is this so important? Firstly, the gross margin is a means by which different businesses can be compared. If a florist's gross margin is 50 per cent and an insurgent is 20 percent the latter has to sell 2.5 times as much value to achieve the same gross margin. So, gross margin is a unique basic comparison of differing businesses.

Secondly, to calculate the profitability of a business all we have to do is to deduct the business' overheads from the gross margin. So if the gross margin is Rs.1000 and the overheads are Rs.600 the net profit is Rs.400. Overheads tend to be fixed in the short term so the gross margin becomes a good indicator of profitability and can be calculated quite simply.

Alternatively, our accountant can help us set a basic measurement of our gross margin on a weekly or monthly basis.  Well, at least from day the of saraswathy Pooja, Keep our negative thoughts aside & we’ll start our new life with profit alone and kill all the bills. As per belief,  when we pray whole heartedly to goddess saraswathy  who in turn enhance our careers.  Believe in the Best.

All is well,

D.SoundaraPandian
immortal_cs@sify.com
9443731929, 9345089453