Your financial records hold the key to profitability in your business. Want to know how to find that key? Any time of year, but especially during tax season, this valuable insight is available to you. All you have to do is review your financial records.

Let’s take a look at the steps you need to take to get this information. Good bookkeeping practices can help you unlock profits!

Step 1: Review Your Financial Records

This is something you can do anytime of year, but it may be particularly easy to do during tax season, or at the end of the year when you’re reviewing. Take a look through your past financial records, with an eye to sales.

If you do not have your bookkeeping up to date, this is a good time to pause and get that done first! This will help you move through the rest of the process.

Specifically, it’s important to take a look at two things: which time of year and which offerings bring in the most revenue.

Step 2: Take Note of Time Cycles and Best Offerings

By studying your financial records with an eye to times of the year, you can learn a lot about how your business behaves over time. Whether your business is product- or service-based, it is likely subject to fluctuations. It’s likely that these fluctuations are seasonal, or else focused on specific events.

For example, let’s say you own a craft business that brings in the most revenue in the spring and early winter. If you look closely at your records and what you’re doing in your business throughout the year, you might realize these spikes in revenue come from particular sources. In a craft business, it might be that there are several public craft fairs you like to attend in the spring. In early winter, perhaps people buy your products as Christmas gifts. (For some advice specifically about craft fairs, please check out this post!)

By analyzing your financial records, it becomes more apparent to you what times of the year and what offerings bring in more revenue. This makes it easier to direct your energy towards maximizing your profits.

Step 3: Using this Info

Now that you’re clear on the products or services that bring you the most revenue, as well as the time of year, events, or other factors that effect this, it’s time to put this info into action. How can you re-create these conditions to bring in more revenue?

For example, perhaps you have one product that’s particularly popular – can you create variations of this product? Maybe it’s especially popular during summer – can you do extra promotions or bring in more stock? How can you expand here?

Ask yourself the questions above, and think about what results you’d like to achieve. Would you like more revenue? More sales of a certain offering? Or perhaps you’re just not clear about what’s working best in your business. Analyzing your financial records can help you figure this out.

Once you’re clear on what your goals are, and what offerings and times of year are the moneymakers in your business, you can put together a strategy based on your findings to create more profitability in your business.

Conclusion

To maximize your profits, focus your business’s energy towards your most profitable offerings and times of year. Reviewing your financial records will help you determine this information.

This is also one of many things a good bookkeeper can help you discern from your records, and something that I regularly do with my clients. If you’d like some support in this process, you are welcome to schedule a curiosity call with me.