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7. Your Trading Account

Your financial reports depict the general health of your business and having a good understanding of these reports enables you to pinpoint areas that require a more detailed diagnosis.

The three most important financial reports for your business are: 

  1. Your Trading Account.
  2. Your Profit and Loss.
  3. Your Balance Sheet. 

Let’s focus on your Trading Account. In English (rather than Accountanese) your Trading Account is like a lap counter on a race-track - it measures the return you are making from each sale after you’ve deducted the direct (or variable) costs incurred to make those sales. 

For example, if you’re selling computers, the Trading Account measures the margin you have made after you’ve paid for the cost of bringing those computers into stock to be sold. Or, if you’re selling labour, the Trading Account measures the margin you have made after you have paid the wage cost of that labour.

Fixed costs like rent, power, phone and loan interest are excluded as you incur these costs irrespective of whether or not you make sales.

The key thing to monitor in your Trading Account is your sales. Clearly you want sales to be going up but, more importantly, you should know which items you are selling more or less of. Breaking your sales into categories, locations or departments will give you greater visibility over the strengths and weaknesses in your sales process. 

Use your sales by product or service to calculate your average dollar sales and your sales by customer. Drilling down into your sales helps you to better diagnosis your trading strengths and weaknesses.

Next, you need to monitor your gross profit (ideally as a percentage of sales). Your gross profit % is the average proportion of every sale you have left after paying the variable costs. The higher the %, the more efficiently your business is operating and the more you’ll have available to cover your fixed costs. As with your sales, if you can report on your gross profit by product or service, or by location, you’ll be able to better evaluate the health of your business.

Now, calculate your breakeven point. This is the dollar value of sales you must achieve at your current gross profit % to cover your fixed costs (including a fair wage to yourself as one of those costs!).

With cloud-based accounting systems and real time data, it’s now much easier to create a regular monthly Trading Account. From here, we can work together on strategies to boost your sales and improve your margins.

We’re keen to help you get the most value from interpreting your Trading Account… contact us for more information.

"If you don’t know your numbers, you don’t know your business." - Marcus Lemonis

What our clients say

For us, there is nothing better than a happy customer. Here are just a few that let us know how much we mean to them.

Pete Dungey

Simple, efficient and most importantly, hassle-free.

We found Panthera via our search for a Xero expert. We knew the software we wanted to use, and needed a forward-thinking accountancy partner who could get us up and running, and teach us the ropes moving forward. Tory and her team have always been on hand to answer our questions, and help us to grow as a business, particularly during periods of big change, such as becoming VAT registered. They are always on hand to alleviate any concerns and help to keep our records in order, which makes our year-end accounts an absolute breeze! Being based in Bristol, our relationship is entirely email based, alongside one consolidation meeting at year end - this keeps things simple, efficient and most importantly, hassle-free.

Pete Dungey Kaleido Grafik Limited
Anita van Eijndhoven

Talk Our Language

The support and service we receive from Panthera Accounting is very good. Everything from regular meetings, a prompt e mail response and the transition of our Xero software (which we find very pro active indeed) has and is all remarkably efficient. We find Panthera talk our language and make any process as painless and easy as possible.

Anita van Eijndhoven Quidne-IT
Ash & Tim Lane

Panthera brush aside the stereotype of the typical accountant

We got in touch with Panthera Accounting by way of a recommendation; we haven't looked anywhere else since. They are an extremely professional yet relaxed group of people. We were slightly daunted by the idea of accountants but Panthera brushed aside y the stereotypes. They are very understanding when answering any questions we may have. They are completely efficient, offer sound business advice, and are fantastically priced. We will continue to recommend them.

Ash & Tim Lane Starveacre Fencing
Jayne Johnson

An Asset to my Business!

The whole team at Panthera are great! Working with them has been a huge support to my growing business. They help me to understand the numbers I need to know. They give me technology solutions like Xero so that I can process things quickly and have access to my own figures. They are quick to reply, highly knowledgeable, nothing is too much trouble and as well as making sure that everything is compliant and on time, they are enthusiastic, professional and fun to work with.

Jayne Johnson Better People
John Baker

Absolute joy - they provide a first class service on every level

Working with Tory and the team at Panthera is an absolute joy - they provide a first class service on every level; from simple Xero issues through to more complicated tax enquiries, they’re always on-hand to help me get it right. I’m certainly not their biggest customer, but I’m always made to feel like their most important one.

John Baker BKR Solutions
John Castle

Professional and Friendly

I would like to say that Panthera Accounting have helped me with my business accounts for more than 4 years now. They have consistently offered an excellent competitively priced service that works both professionally and in such a friendly way that I would highly recommend them to everyone considering using their services.

John Castle Ilexanna Limited & Birch Castle Homes Limited
Jonathan Morrison

They are always there to answer queries and sort out issues

I had been with Mr Dunn for 20 years when upon his death Panthera took over the business. They now play a bigger part in the running of my business, they do all the stuff that has to be done but I don't like doing ie book keeping, VAT, wages, and returns. They are always there to answer queries and sort out issues and make sure all Tax deadlines are met. Their costs are fair, service is great and I have and would highly recommend them.

Jonathan Morrison Wallingford Builders
Pippa Scott

Professional, friendly and personal service.

Panthera Accounting have gone above and beyond the call of duty to guide and support our Company. They offer a professional, friendly and personal service that can take the stressful and sometimes frightening feelings out of running a business. They have guided us through the working of Xero and have offered “teaching sessions” on the day to day running of the accountancy package. Our only regret is that we didn’t join their team earlier.

Pippa Scott Scott's Commercial Services Limited
Sara Southey

Panthera puts the personal back in to accountancy!

Tory and her team have provided a friendly, approachable and helpful service from the start. They have delivered a quality service, above and beyond anything I could have expected. Panthera, with the help of the Xero package, have taken the stress, strain and confusion out of managing my company and personal accounts. I look forward to working with them for many years to come.

Sara Southey Bluestones Garden Design
Tracey Miller

Panthera are fantastic.

Panthera are fantastic. Always professional, going the extra mile for their clients and delivering superb service. I recommend them all the time to my clients.

Tracey Miller Bigger, Brighter, Bolder BBB

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  1. We jump on a quick call to create the perfect service package for your business
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