Operational Efficiency

This is another metric used to test if the organization is truly profitable. It's definitely a big picture metric, but a good manager/supervisor/CEO will always know this number. It essentially tests how efficient the work input was against the actual output of the organization.

The Formula:
Operational Efficiency = (Work output ÷ Work input) x 100%

Why is this number so important? There have been many companies in the past that, despite good sales, simply are struggling to break even. This could be due to many reasons, but knowing how efficient the operations are could help to narrow down the search. On the other hand, even if a company is doing well, it still wouldn't hurt to know this figure given that there may and probably still is room for growth. In the end, no business should waste any resource that they have available. #KnowYourNumbers

What this looks like:

  • Set objectives and make sure the team knows the benchmark.
  • If specific jobs need to collaborate, then put them near each other.
  • In manufacturing, make an assembly line, building and rearranging where necessary.
  • Identify where the waste is occurring and eliminate it.
    • Setup and maintain a maintenance schedule (properly maintained tools function better).
    • Eliminate bottlenecks (no one should be held up from completing a task because someone else needs to finish their job).
    • Clean up and organize workstations (clutter makes it difficult to find things).
  • Continuously monitor and manage performance
  • Provide better support to the employees

What to remember: just because money is coming in doesn't mean that the company is operating at maximum efficiency. To be profitable and sustainable in the long run, a company must eliminate the waste.

Websites: Goals

I don't know how many times I've said that every business needs a website, but that truth still stands and can be a vital asset to a company. However, a bad website can arguably hurt a company as much as not having one. That's why there needs to be goals and a plan for the site.

Questions to ask yourself?

  • Why are you creating a site?
  • What are you trying to accomplish?
  • Who are you trying to reach?

These questions may seem similar, but they cover very specific areas. For starters, just like choosing a path for the business you need to know why and the why needs to be focused. Otherwise, the site could easily become disorganized and unfocused. This is different from what you're trying to accomplish. What are your goals? Do you want to sell on the site? Are you looking to start a blog? These questions will help determine design and setup of the site. Lastly, the demographic is extremely important. Along with helping tp determine design and setup, this will also help determine the marketing and SEO aspects of the site.

What to remember: Planning is key. Before you ever start to develop a site, whether with an outside developer or with someone in your organization, create a plan.

Working Capital

What is working capital? This is very simply the difference between your current assets and liabilities. In other words, the difference between the amount of "cash" that a company has readily available and its current debts. The current assets can be thought of as the various forms of cash that a company has available. Basically, if you can turn an asset into cash within a year without taking a loss on its value, then, generally speaking, it's a current (also called quick) asset. Current liabilities are basically anything debt/bill/obligation due within a year.

The formula for this one looks like this:
Working Capital = Current Assets - Current Liabilities

What to remember:

  • Working capital deals with the short term financial health of a company.
  • It can be a good indicator of whether or not the company is operating efficiently.
  • This is a good figure to know, but it doesn't tell the whole story.
  • This shows whether a company's short-term assets can cover its short-term debts.

Websites: The Big Picture

Conversations can go many different directions when we're talking to customers. Sure, we can try to direct them towards where we want them to go, but that can be difficult some times. This is why having a website with great and curated content is so valuable.

What does this look like? A website can be used to fill in the gaps that were missed in your conversation and help the customer to see the big picture. Trying to convince someone to part with their hard-earned cash can be difficult, especially as the price goes up. Pointing that customer to curated content explaining why the investment is worth it can help to bridge the gap.

What to Remember: Help the customer to fill in the gaps by creating a curated and, if needed, custom page for them. This page should go over the things that were talked about and give further explanations. This is a chance to help show them the big picture.

Current Ratio

This ratio is simply a calculation used when examining short-term liquidity. In other words, can you pay off your liabilities with your assets? Just as we wrote in last week's article, this is just a ratio, just a number and doesn't take into account the complete picture. However, it can be used as a tool in determining the financial health of a company.

The Formula for this ratio is:
Current Ratio = Current Assets / Current Liabilities

What to Know: Generally speaking, this number should be above 1, 2 would make a company appear very financial healthy, and below 1 would signify that the company has some potential issues. Of course, as is the case with other ratios, it doesn't tell the whole story. For instance, retail sometimes has a number below one given that a supplier may offer a longer credit period, while the retail shop offers a shorter credit period. Regardless, keeping this number above 1 and closer to 2, is where you want to be located.

What to Remember:

  • This ratio:
  • Includes all current assets and liabilities.
  • It is an indicator of a company's ability to pay back its liabilities with its assets.
  • This number should generally be above 1.
  • A liability is generally considered current if it is due within a year.
  • This is merely a rough estimate of a company's financial health.

Websites: The Need

I recently heard someone say, "do you really need a website? I mean isn't that what facebook is for?". While social media does help create a presence for many businesses, it's not a website and shouldn't be used as such. Social media should be part of your overall web presence, but not your customer's only source for finding out about who you are and what you do.

What does this look like? A website makes your company visible to the general public 24 hours a day 7 days aweek and because of that it should represent you well. When you've called it a day and no longer have the energy to keep going, your website is still hard at work, unphased by the days activities. With that in mind, your site should have images that convey who your company is and how you operate. It should also have content that "sounds" like you. We all have a voice that comes out in our writing. Customers know when it's not you and they know when the writing sounds generic. Be yourself.

There's also the customer perspective, when I've found a new company, I always google them, check the website, maybe see what they're doing on social media, but regardless I always search for their site. This is how I find out about the company, find where they're going to be, or where their business is located (those last two can be very different). Regardless of whether I want to read up on a product or just check the hours of operation, making this information available and easy to find is critical. Your site and how well it functions could either remove or put up a barrier for the customer.

What to Remember: a good website is different from that thing you call a website that hasn't been touched in years...

Quick Ratio

The quick ratio or acid test is simply a liquidity test. It's another metric for letting a company know where it stands and how healthy it is financially. Now, this ratio certainly doesn't tell the whole story, but simply is a good metric to keep around when doing a financial check-up. If you don't know the formula off hand, then here it is:

Quick ratio = [cash and cash equivalents + marketable securities + accounts receivable] / current liabilities.

The quick ratio probably derives it's name from the fact that it deals with the assets that are readily avaiable to pay bills should they be needed. i.e. your warehouse and inventory don't count... but cash in the bank, stocks (in general), and accounts receivable can be used in this calculation.

Why are inventory and the warehouse left out of the picture? Well, if you had to use inventory to pay off a debt that was due immediately, whether that be the electric bill or debt, then you would probably have to sell at a discount in order to move the inventory quickly. Therefore, this isn't the best option and, regardless of the economic environment, selling even a small building can take time.

What is consider quick assets? Generally speaking, assets that you can turn into cash quickly without incurring a loss. That's why, going back to the previous example, things like inventory are left out of this calculation. I look at as a collection of your various forms of cash.

What to remember? Numbers, ratios, statistics, etc. aren't everything, but they're great tools in determining the financial health of a company. Therefore, however you accomplish this, know these numbers. Whether that's a CPA and/or your in-house software, make sure to check these numbers on a regular basis. This will help to avoid big issues from unexpectedly popping up.

Remote Working?

Remote working isn't becoming a big thing, it already is. Obviously the millennial generation is making up a big portion of this demographic and this is definitely in part due to the ever growing need for coders/software developers/programmers/etc. The big question is how this idea of working remotely applies to everyone else?

One of the most obvious is simply as a benefit to your team. It's not that your person in charge of billing is going to suddenly start working from home 100 percent of the time. However, given the option, this idea can make it possible for everyone to be more productive. Working remotely also doesn't have to be all or nothing. It can be one day a week, every other day, on an as needed basis, or any other combination. All a person needs is the ability to log into their work computer/server or work from a laptop that they can take with them. What this does is make it possible for employees to work from home when say their child is sick. We could come up with all types of scenarios (like how the ability to work remotely is a great tool for disaster preparedness), but the key is to be creative and to look at this as an opportunity to offer a great benefit to your team.

Do you have a remote work policy? if so, let us know (just click here). We'd love to hear how you've implemented the idea of working remotely.

What is accounting?

The American Institute of Certified Public Accountants (AICPA) defines accounting as: -the art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least of financial character, and interpreting the results thereof.

That's one way to look at accounting. Other ways would be both as an art and a science. Now, I'm not trying to make something out of nothing, I truely mean what I just wrote. Accounting, to me at least, is partially an art because that information is taken and then extrapilated upon. Bussinesses make critical decisions about strategy and planning based on this information and, lets face it, there's not exactly a rule book. On the other hand, accounting involes a lot of rules about how that information is to be organized, which is definitely more science than art.

Regardless of how you define accounting there's one simple fact that cannont be ignored: every owner (and, for many businesses, every supervisor) must have an appropriate clear picture and understanding of the company finances.

What to remember? make sure to aquire the services of a CPA that has your best interest in mind and to also have in-house software that keeps track of every transaction while organizing it in a way that makes sense to you.

WIFI Safety

We talk a lot about safety and that's because, while browsing the web is generally safe, there's a few things that people sometimes take for granted. Such as being in a hotel and just clicking on the guest WIFI. This may not seem like a big issue, but when connecting to a public network there are some things to keep in mind:

  • Don't access sensitive information (i.e. your bank)
  • Don't enter sensitive information (i.e. credit card or social security number)
  • Use a VPN if possible

The reason we make these recommendations is because of how easy it is to be hacked. For instance, at a recent hacker's conference, a group a hackers showed just how easy it is to access someone else's computer. Essentially, they setup a fake guest network at the hotel as a test. Someone was told about that the group was going to try to hack their computer and asked to go about their normal process. They actually logged into the fake network... By the end of the day, the hackers had the persons social security and credit card number, as well as their room number at the hotel.

What does all of this mean? Simply put, be careful and use common sense practices when connecting to the internet.


Secure Sockets Layer. Just in case you were wondering what that acronym in the title meant. This essentially is a technology that secures the connection between your browser and the website that you’re visiting. i.e. when you see https: instead of just simply http: then you can be assured that there's an SSL setup and that the connection is more secure.

What does that really mean?

It means:

  • More Privacy. So, when you're logging into a website, such as your bank, this setup goes the extra step and encrypts that information so that it is transmitted securely.
  • Stops Unauthorized Changes. Basically, no one can change the information during transmission.
  • Authenticity. This setup also requires the web server to essentially prove that it is who it says it is.

Also, a plus to having the SSL setup is that it can actually improve your rankings in the search engine. I wouldn't get the SSL setup for this reason, but it can't hurt.

What to Remember: you want every site to have an SSL setup, but don't even consider entering sensitive information into a site if you don't see https:.

World Backup Day

March 31 was World Backup Day. Backups, as we all know, are critical. But did you know that: 75% of computer users don’t backup properly and 75% of data loss is due to hardware failure or human error (i.e. accidentally deleting a file and not having a backup). Backups have always been critical, but, in the age of ransomware, backups have become even more important. 

Maybe you're asking: “what is ransomware?” Ransomware is simply a virus that attacks and encrypts the data on your computer, rendering it unusable. The creator then requires a “ransom” of hundreds or thousands of dollars to the hackers to get a key to unlock the data.

Some stats:

  • 59% of ransomware infections are delivered via email attachments
  • and
  • 47% of businesses have been affected in some form by ransomware.

So what can you do? Here are six key steps to take in an effort to secure and protect your computer’s data:

  1. Backup: diversify the locations so that the failure of any single point won’t lead to irreversible loss of data.  i.e. physical media (local/offline) Cloud, Dropbox, Carbonite. It’s good to have at least two to three different methods of backup.
  2. Personalize Anti–Spam settings: block .exe, .vbs ,or .scr files
  3. Refrain from opening suspicious attachments: this includes unfamiliar people, notifications from FEDEX, E-commerce, banking, or law enforcement.
    • Look for:
    • improper use of language and misspelling
    • the wrong From: email
  4. Think twice before clicking: dangerous hyperlinks can be received and appear to be from a source that you trust. Remember that you can hover over the link to see where it is actually connecting to, but if you do be very careful to not accidentally click the link.
  5. Show file extensions: this is a native Windows Explorer function. When turned on it shows the true type of file. For example, a file could look like a picture file, but really be an executable file. Clicking on this image, for whatever reason, could open and spread a virus. By turning on Show File Extensions, the system would show that it was an executable (.exe) file.
  6. Patch and keep operating systems and other software up to date

Cloud services can also be used to help mitigate ransomware infections. Cloud services host your data and can offer the ability to separate your email from your data. If your email is local and your data is hosted, then it will be extremely difficult for the ransomware to reach your data. In addition, should that happen, cloud service companies are able to roll back your data to a pre-ransomware condition to get you back up and running quickly.

Using email services like Office 365 can keep your data much safer than on a local PC.

Look into installing ransomware software. There are a number available, but Malwarebytes is one popular product that will look for incoming ransomware attacks.

Nothing is 100 %, but following the steps outlined above and keeping your data properly backed up will make your data much safer.

New Credit Card Enhancement

Most distributors have customers who say something like “Keep my card on file and pay these invoices when I tell you” or “Keep my card on file and pay cylinder rent each month.” If you do this for your customers, then you know how time consuming it can be to process each card individually and then post the payments to their account. An upcoming credit card enhancement will make this part of your payment processing much easier.

The new program will feature an option to identify whether or not a customer wants regular and/or cylinder rent automatically paid with a credit card. When you run the payment program, it will check the customer file and will pay all the open invoices automatically. This includes getting the approval code from the card processor and then creating the cash receipts entry for the paid invoices. The operator doesn't have to request approval on each card nor do they have to create the cash receipt payment.

If your customer wants to pay by credit card, but they want to tell you which invoices to pay, a list of unpaid invoices will display on the screen. You simply check off the invoices they want to pay and then the program does the rest.

Have questions? Let us know by sending us an email


Spyware can take many forms. One of the most obvious are those executable files that come in emails. Of course you never want to open one of those, but what about the ones that aren’t so obvious? What I’m talking about is the banner ads that I refer to as “click bait” or the amazing piece if software that’s going to double your computer’s speed. Is all “click bait” bad or all accessory programs loaded with spyware? No, of course not, but the idea here is to be careful and use common sense. Read the fine print and make sure that there aren’t any boxes checked that you didn’t check yourself (I’ve seen this last one more times that I can remember…). So what do we recommend that you do with this information? Well, there’s a few things that we have recommended in the past and would continue to recommend.

Those are:

  • Don’t open emails or their files unless you know and trust the person or company.
  • Don’t download any software unless you are positive that the source can be trusted (If you need a recommendation, just ask us).
  • If you’re not sure about a particular link, then hover over it with mouse (assuming that you’re on a desktop). The actual location will be shown, in most browsers, in the bottom left-hand corner. This little trick should help you discern whether or not the link is taking you to the location stated.

With all that in mind, don’t be worried about browsing the internet. Use common sense, install spyware/malware protection, and you should be fine.