Let’s start by outlining the playing field: we’re dealing with service companies generating annual revenues of several million PLN, struggling with financial disorder. These are sizable businesses seeking advanced financial support, when in reality, implementing just a few basic measures would make a significant difference. They lack tools, reports, cost control, and clear information on whether they are actually making a profit. In this article we will walk you through how to organize your business finances step by step.
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1. Take Care of Accounting and Source Data – Get Rid of Paper Invoices, Implement a Document Workflow System
Why is this important?
Many business owners mistakenly believe that working with an accounting office is enough to manage finances effectively. It isn’t. Accounting won’t tell you how much you really earn, where you’re losing money, or which costs are growing.
If you want to run your business consciously and effectively, you need:
- Management reports
- Margin analysis
- Cash flow data
- Analytical tools that support decision-making
Where to start?
To produce meaningful reports and insights, begin by organizing your data flow. Concrete steps:
- Eliminate paper invoices.
- Implement a document workflow system like:
- Saldeo SMART
- Taxxo
- wFirma
- Enovatio Workflow
- Webcon,
- DocuWare.
You can also start with simple tools like SharePoint (Microsoft) or Google Drive. However, dedicated systems offer advantages right from the data collection stage:
- Organize data logically
- Tag and categorize
- Pre-code entries
This structure makes it easier to use the data later in financial analyses.
Working with your accounting office
Your accounting firm might already offer plugins to support document workflows – often at no additional cost. That makes integration quick and easy.
Digital Document Workflow: The Key to Financial Clarity
Perhaps the administrative tasks related to document workflow are currently handled by a full-time employee in your company. Or maybe you’re doing it yourself as the founder. If that’s the case – it’s time for a change. Introduce a clear “workflow” for invoices and payments.
Here’s a list of tasks that can be easily automated or simplified using an electronic document management system:
- Generating a payment batch from the document management system – instead of making manual transfers.
- Introducing a fixed payment schedule – ideally once a week or every two weeks. You already have a document workflow in place, so there’s no need to log into your bank every day. Plan your payments once a week, every two weeks, or even monthly. Connect your document workflow system with your bank – either via API or by generating a payment batch and uploading it to your online banking. Not only does this bring order to your finances, but it also saves you some valuable time.
- Replace a payment admin role with simple automations and save half a headcount
- Tagging incoming invoices – directly in the system. This way, you can categorize revenue invoices by type of activity or assign them to a specific client or project.
- Setting up automation for issuing recurring invoices each month. Do you issue a subscription or flat-rate invoice every month for the same amount? Document workflow systems can handle that for you – and even send it to the client by email.
- Connect your software with the bank (via open API):
- Pull data automatically from the bank
- Match payments with receivables and expenses
- Eliminate manual data entry in Excel
- Use automatic reminders for overdue payments (soft collection)
How to work better with accounting
Make friends with your accounting team. They’re an invaluable source of insight into your business. Your accounting office doesn’t have to be just a “document collector” – it can be a trusted business partner. Ask if they can provide you with a plugin for your document workflow system. Request specific reports on a quarterly, monthly, or even weekly basis. Ask them to post entries using a customized chart of accounts. This will help you monitor business performance or create reliable budgeting based on a tailored account structure. And in the future, if you plan to sell the business – all the data will be readily available.
If you want accounting to support your company’s growth, start with a conversation
Discuss your needs:
- You want data not just for compliance,
- but for understanding business profitability at different levels
Cheat sheet: What you can request from accounting
- Financial reports more frequently than once per quarter. Even raw data is better than none.
- Categorize costs with basic segmentation:
- Direct costs of service/product delivery
- Sales expenses
- Marketing expenses
- General & administrative costs (so-called overheads)
- Use a simplified managerial chart of accounts (the “5 layout”):
- It’s not the same as a traditional chart of accounts,
- but it allows for deeper financial analysis based on accounting data.
- With this kind of account structure, you can also carry out more reliable budgeting and financial planning.
What do you gain?
- Visibility into where your money is going
- An accounting partner who provides decision-making data
What if… your accountant won’t cooperate?
If your firm refuses or fails to communicate – that’s a red flag. Consider changing providers. There are accounting firms that know how to collaborate and support growth. If you’d like, feel free to reach out by email or on LinkedIn – we’ll help you find a trusted partner.
2. List All Fixed Costs
A critical part of financial management in a service business is the regular creation of a management report that clearly answers:
- What do we really make money on?
- What are our margins?
- Which costs can we control or reduce?
Surprisingly, you don’t need advanced tools. A simple Excel or Google Sheets file will do.
What should a monthly management report include?
1.Revenue data
Break down revenue by:
- Type of service
- Client
- Project
This doesn’t have to be complex – just logical. The goal is to see what brings in the most money.
2.Direct costs
Costs directly tied to client delivery or service provision, such as:
- Contractor compensation
- Subcontractor fees
- Materials needed to complete an order
These are essential to determine true project costs and margins.
3.Client and project profitability
Combine revenue and direct costs:
- Project A: Revenue PLN 15,000, Direct Costs PLN 6,000 → Gross margin PLN 9,000
- Project B: Revenue PLN 8,000, Costs PLN 7,500 → Gross margin PLN 500
This highlights profitable vs. time- and resource-draining work.
4.General administrative cost analysis (“overheads”)
Separate fixed operational costs that aren’t tied to specific projects:
- Office rent
- Software subscriptions
- Admin salaries
- Accounting services
- Internet, phone
Compare general overhead to total or direct costs monthly.
It signals changes in cost structure or creeping inefficiencies.
5.Business result (Profit or Loss)
A basic but crucial formula:
- Revenue – Total Costs = Net Result
Monitor this monthly to guide action:
- Low result → increase sales or reduce costs
- High result → consider reinvestment or team expansion
6.Cashflow
A profit on paper doesn’t mean cash in the bank.
Maintain a simple cashflow report with:
- Outstanding receivables (especially overdue)
- Weekly bank balances
This lets you:
- Forecast liquidity issues
- Follow up on payments
- Make decisions about payroll, investments, or supplier payments
Data automation = Time savings & efficiency
Automate source data retrieval:
- Use reporting templates
- Just swap input files (e.g., bank exports)
Benefits:
- Less manual work
- More time for insights and action
Why does all this matter?
Without cost awareness, you can’t control or scale a company. Even micro-entrepreneur needs basic financial visibility. Listing all fixed costs gives you instant clarity.
3. Key Financial Metrics to Track Monthly
To better understand your company’s performance, implement simple yet powerful metrics:
a) Billable Utilization
- How much time does the team spend on client-billable work vs. idle or non-billable tasks?
- Low = Underutilized team
- High = Effective use of resources
b) Average Project Margin
Formula: Revenue – Direct Costs = Gross Margin
Lets you:
- See profitability per project
- Calculate average margin across all work
- Compare projects and prioritize best-performing ones
c) CAC – Customer Acquisition Cost
Formula: Total Sales & Marketing Spend / Number of New Clients
Example:
- PLN 10,000 spent, 5 clients acquired → CAC = PLN 2,000
Helps evaluate marketing ROI and trends over time
4. Build a Simple Revenue & Cost Tracker
You don’t need to implement advanced tools like Power BI from day one. Start with a clean, simple spreadsheet in Excel or Google Sheets. The key is to begin collecting data.
Your tracker should have three main sections:
1. Project or client-based revenue
Break down your revenue by specific projects or clients. This will help you:
- See which collaborations generate the most profit
- You don’t need to go into too much detail – just a simple, logical breakdown that allows you to draw conclusions.
2. Direct costs
These are necessary to deliver your service:
By collecting this data, you can accurately assess how much it really costs you to complete a given project.
3. General overhead (also known as general and administrative costs)
From all the expenses your company incurs, separate the ones not directly related to client work. These are known as general overhead costs.
Listing them in a separate column will allow you to analyze each month:
- The proportion of these costs to the company’s total expenses
- How they change over time – whether they’re increasing, decreasing, or stabilizing
- Whether your cost structure is balanced
Why this structure matters:
Combining these three categories in one spreadsheet will allow you to:
- Calculate your operating margin
- Identify which projects and clients are the most (or least) profitable
- See which costs are increasing and which are under control
Formula for operating margin:
Revenue – Direct Costs – Overhead = Operating Margin
This result gives you a true picture of your business’s profitability. With this simple tool:
- You make better pricing decisions
- You know which projects to grow and which to let go of
- You see whether scaling your business makes sense or if you should first work on improving efficiency
5. Identify Time & Money Wasters
Hidden project costs
Many business owners don’t realize that some projects drain resources without proportional profit. A “big” client may end up barely breaking even.
How to spot them: Start by tracking time spent per project. You don’t need fancy systems:
- Use basic spreadsheets
- Try free tools like Toggl or Clockify
- Over time, consider time-tracking integrated with CRM or PM tools
Compare time vs. revenue:
- Project X: PLN 8,000, 20 hours → PLN 400/h
- Project Y: PLN 5,000, 60 hours → PLN 83/h
What this reveals:
- Which projects to scale or drop
- Opportunities to automate, delegate, or eliminate
- Increased profitability without more work – just smarter selection
6. Don’t Be Afraid to Raise Prices
Small firms often undercharge. If you don’t know your margins, you might be working for free. Transparent data helps you decide when to raise prices or change your offering.
7. When to Hire a CFO or Advisor?
Not every business needs a full-time CFO. But if you exceed PLN 1.5M in revenue, consider:
- A fractional CFO (hourly financial expert)
- BI tools (e.g., Power BI)
- Support with data analysis, planning, and budgeting
8. Where to Start?
To sum up:
👉 List all fixed costs
👉 Check margin by service
👉 Track cash flow
👉 Set financial goals and monitor monthly
👉 Don’t guess—decide based on data
At incro, we help founders and CFOs prepare for exits by strengthening financial operations, streamlining reporting, and improving business performance. We act like your internal finance team – without the cost of full-time hires.
💬 Get in touch at https://incro.us/contact/
