How to track and manage business profitability?

If the business is online then you can take help of google analytics as it provides best insights

For any business One should understand break even..

1. Cash inflow is very important & where are we spending. 

2. Ask yourself are we heading in right direction

3. Understand our expenses including fixed cost like manpower, infra etc., to understand the break even. 

4. If possible should try to reduce costs for better profitability..

5. Explore revenue generation avenues for better profitability.

6. Depute "Right people on the right job"

In most companies, the executive team has a profit plan, each department head owns an important element of the plan, and progress to plan is watched closely. Yet even if each manager meets objectives, the company is still a lot less profitable than it should be. The reason? In most companies, no one is responsible for managing the interaction of these elements to increase profitability to its full potential.

Business in my opinion where u earn profit but other side should be the same, to track you should know what u added in your business. There are lots of ERPs, u can choose one of them.

We have to closely monitor income statement, Cash flow statement and Balance sheet.

Balance Sheet:  This is a cumulative document that lists your company's assets and liabilities, among other numbers, from the time you started your business. Reviewing our balance sheet gives you quick handle on the financial strength and capabilities of your business.

Income Statement:This document lists your company's income (revenue or sale) - expanses. This also called as profit loss statement.

cash flow statement: Its helps you to stay on the top of how much money cam and went thourgh the business for the period of time.  Its critical document, it helps to understand why, even if company appears to  be turning a profit also.  

I agree with the experts answers. Thank you.

For better profitability ,following measures should be taken :

1. Should understand MOC and specification of material and then place the orders accordingly.

2. Vendors must be developed as per requirement  

3. Cost cutting should be done without compromising quality

4. On time order placing for raw material

5.Cost Analysuis before placing orders

6. Before sumission of quote ,offers must be checked thoroughly.

7. Reducing overhead cost and other cost without influencing quality of product & work etc

8. Deploying of people for work as per their expertise i.e. right person as per job requirement

9.Execution of job as per giving schedule

 

The main thing which is neccesary to track and manage business profitability is the Policy where the whole business is lies, if anyone make his business profitability then it develope many purpose for profit like if you have amind a dairy farm but can not be consisting only dairy farm, it can be include dairy farm,biogas plant,solar system and cultivated land . So from different ways your cost will be resuce and profit definately increases.