Finances aren’t easy to navigate, especially in a busy flower shop. In the September/October issue of Floral Management, Paul Goodman, AAF, PFCI, answers some of the most pressing financial questions to ensure a healthier bottom line.
“Should my payroll percentage increase during holidays due to overtime?”
Absolutely not, says Goodman. During holidays, with the increased volume of orders, your payroll percentage should decrease because you should be more efficient. Increased labor costs often point to poor management or lack of planning. By properly organizing staff and optimizing productivity, a shop can minimize overtime and boost efficiency. For example, production designing during busy periods should reduce design wages as a percentage of sales.
For more guidance on forecasting staffing needs, click here.
“Why does my income statement show profit, but I don’t have cash?”
Goodman explains that cash flow can be tricky because it’s often used in ways that don’t show up on income statements. For instance, if you make a down payment on a van or pay down debts, those expenses won’t be reflected in your income statement but will affect your available cash. Over time, these costs will balance out as items on the balance sheet make their way through the income statement, or as loans are paid off.
Check out the Ask the Accountant column in the September/October issue of Floral Management for Goodman’s advice on more finance topics.
Have a question for Goodman? Let us know here.
Amanda Jedlinsky is the senior director of content and communications for the Society of American Florists.
