It is the part and parcel responsibility of every business owner, whether running a small/medium or an entrepreneurial firm to keep checking on the crunching profit numbers. However, most of the business owners either do not have the system in place or do not have the time to do it for them. Moreover, if looking at the business bank account at the end of every week is not making sense to you, then it is time for you to work on your business numbers and statistics by optimizing system and process.

Your business needs a proper reporting system that provides timely updates, insights and reports that shows how your business is performing over a period. Well, here we are going to discuss 3 ways to know your business numbers which in turn can give you more control over your profit line.

Detect Problems Early

Haven’t we all have heard the saying, “Prevention is better than cure”, but seldom we do implement. But, to run a business successfully, one has to have an eye to spot, detect and take action on it before it gets too late.

1) Unpaid Invoices:

Getting paid on-time, keeps the business in perfect operation. But what if, when you don’t? It is definitely going to affect the financial figures and hence, less business profit. If you have various unpaid invoices at a given time, then your priority should be to identify reasons behind it. You need to find out, which of your customers are irregular in paying and are always on the receiving end of past-due notices. There are different ways of collecting payments from such slow paying customers which you can read here.

2) Keeping Track of Profit:

You can get a hold of your current financial situation by comparing monthly, yearly financial statistics to get a clear picture to identify and work on improving net profit of the business. The key determining factors for your net profit are,

Revenue
Expenses
Profits
Debts

3) Take Feedback:

Take timely feedback from customers via surveys and forms. Also, you could develop a business communication channel to have regular conversations to pinpoint the areas which need improvements. Well, the customers’ opinions may vary but a general outlook on surveys will give you heads up on the few inconsistencies which you can uniformly work upon.

Know The Value of Valued Customers

You can check your clients’ payment report and data to know who tops the chart. As, these are your loyal, good-paying customers who like your products and/or services and are more likely to recommend your business in their community. Reaching out to them via goodwill note/postcard or a discount gesture in services shows the effort from your side in keeping them as valued and long-lasting trustworthy client-customer relation with them.

Watch Your Spending

Multiple payment categories such as credit/debit cards, cheques, online payment gateways, etc have made it easier to clear pending invoices. However, it is also equally easier to lose the track of spending while distracted by hundreds of daily business tasks. Even at times, you might think to look at those long list at a later time which unfortunately you never seem to find out.

With an online invoicing platform, you could easily monitor your expenses categorically and deduce the spending trend to either cut or modify accordingly.

All-In-One Solution

Moon Invoice, a simple and easy online invoicing platform can streamline your entire expense management process with its ‘Expense Tracking’ feature. The feature can help you optimize, organize and can help you to take necessary action if your monthly/yearly expenses are heavily accountable.

Few of the ‘Expense Tracking’ features at a glance are:- Track Expense, Categorize Expense, Record Expense, Know Where You Spent More & Hassle-free Tax.

Recurring Payments Vs Recurring Invoices

Recurring Payments	Recurring Invoices
Recurring payments charge the customer’s credit card account or debit card account on a predetermined schedule for the same amount as preapproved.	Send an invoice to your customer on a regular basis. The client receives the invoice but, money is not paid unless the customer approves.
A business that takes prepayment of money and sells a monthly subscription service and product. Subscription services are excellent examples of this.	A company that provides fixed services with billable hours is an excellent choice for recurring billing. For example law firms and consulting agencies.

Pros and Cons of Recurring Invoices

Pros	Cons
You eliminate the possibility of human error by automating the billing process. If you use a recurring invoice, you will not be concerned about forgetting to charge your customers for the things they ordered.	You must exercise caution while recurring billing to prevent issuing inaccurate pricing. This also holds for price changes that could take place right once an invoice is created.
If you provide your customers with the option for recurring billing, they are more likely to buy products regularly.	It could be difficult to cope with recurring invoices if a transaction fails for any reason.

Net 45	Invoice is due in full within 45 days with no early payment discount offered
2/10 net 45 terms	2% discount if you pay within 10 days; otherwise full payment of the invoice is due in 45 days
1/15 net 45 terms	1% discount if you pay within 15 days; otherwise full payment of the invoice is due in 45 days
1/10 net 45 terms	1% discount if you pay within 10 days; otherwise full payment of the invoice is due in 45 days
1/7 net 45 terms	1% discount if you pay within 7 days; otherwise full payment of the invoice is due in 45 days

Category	Net Method vs. Gross Method	Explanation
Calculation Approach	- Applies tax credits first; reduces taxable income before computing tax liability.	- Doesn't apply tax credits; computes taxable income without considering tax credits.
Tax Credit Eligibility	- Allows for greater likelihood of tax credit eligibility due to reduced taxable income.	- Limits tax credit eligibility because taxable income hasn't been reduced yet.
Itemized Deduction Requirement	- Lowers threshold requirement for itemizing deductions due to decreased taxable income.	- Raises threshold requirement for itemizing deductions due to higher taxable income.
Advantages	- Leads to lower taxable income and increases chances of meeting qualifications for other tax benefits.	- Results in higher taxable income compared to net method.
Disadvantages	- May miss opportunity to reduce tax burden if taxpayer doesn't itemize deductions or take advantage of tax credits.	- Increases taxable income and may result in higher overall tax bill.