Hey Siri, I want to go to Newcastle
Sure, can I access your current location to give you directions?
Make it so – Engage!
Err, I’m not fully sure where we are at the moment, I think we are somewhere near Kettering
That makes sense, I definitely made the decision to take the A14 not the A1. And I haven’t seen Kettering go past yet, so we must be there soon
Thanks. So keep heading in a northerly direction and I’m sure we’ll figure it out together as we go along
Now think about your business. You have made a decision to expand to new regions or introduce new services or you simply want a push for growth. To better plan for where you want to be, you need to know where you are now – your profits and costs, your drivers and pain points, your people and systems.
You know roughly where you are. Of course you do, you live and breathe the business. But is it enough to move forward with full confidence?
Management information is a great tool to give you financial status of your business at a glance – cash, profits by department, breakdown of sales or expenses, anything you want to monitor. You can also include non-financial metrics meaningful to your business : customers retention, response time, number of security breaches or project schedule variance.
Good management reporting equips you with accurate information not only about well performing areas of your business, it flags potential or existing problems. It calls to action. It empowers you to make better decisions and plan for the future.
Your people, your software and equipment is your power-train to drive you forward. The cash in your business and finance facilities is your fuel. There is a lot to take into account. How long does it take to find the right person? What is the lead time for installing new software or new equipment? Will you pay more as you are in a rush? Your customers take time to pay your invoices. So a period of sales growth can initially be a slower time for cash. If you can feel your engine juddering, then you can be sure that your customers do too. It is better to up-resource in advance of needing it.
That’s when monthly management accounts come into hand. You have important information at your fingertips and a tool from which to plan. No need to wait 30+ days till they get ready. Thanks to the revolution that is real-time digital accounting, it is now much quicker and affordable.
Where are you now and where are you going?