The Australian Small Business Blog

Monday, March 27, 2006

Training – An investment or an expense?


When you buy software for your business, you write it off as a tax deduction that same year. Great, but that is an “expense”. Software that you buy should be thought of as an “asset” —something that will help develop your business.
To work properly, people have to know how to use it, the software must be set up
correctly and of course the software should be suitable for your operations.

Regarding the training aspect, word processing programs will make life easier, but the financial/accounting & operational programs, spreadsheets and data bases will all give you many times their current value if you know more about them.

If you know the programs well and understand the logic of the processes, you can use the data to tell you three things:
- What you have achieved (Profit/Loss for a particular period)
- Where you are now (Balance Sheet, especially your control accounts, customers, suppliers and inventory), and
- Where you are heading (Sales mix & changes, customer data base and the changing mix of your inventory)
Using the data within your records is the basis for past analysis and future planning

When a new employee starts with you, do not teach them bad & restrictive habits, ensure that they are taught good habits from the start.

Used correctly, and as long as the data has been entered correctly, your accounting & operational software can be the springboard for developing your business to greater levels of profitability.

Employers sometimes ask “ If I train my staff in how to do something properly, and they then leave for another job, why should I waste time and money in training them?”
My response – “what is worse, a trained staff member who has been of value, or one who has no training and is an “expense” as well as be a liability to your business?”

Remember:
- Every asset and investment should either save or make you money
- Every expense should be monitored so as to gain the most advantage
And there are very few areas of your business that can gain as much as a comprehensive training program.

John Barnett is the Director of JB Business Systems

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