It’s the business systems that you put in place which enable you to capture meaningful business information with which you can make good business decisions.
I don’t think anyone would dispute that as a business owner you need meaningful business information in order to make good business decisions, yet I see many business owners flying by the seat of their pants, so-to-speak, making significant business decisions without having much in the way of relevant and meaningful business information.
Looking at your bank account balance doesn’t give you a full picture of your business. Just saying.
So what is relevant and meaningful business information?
I’ll give you just a few examples of the kinds of questions that I want answers to in my businesses.
- What is the gross profit vs net profit?
- What is the business’s break-even point?
- How much money is each product or service making?
- What sort of return is my marketing spend giving me?
- If I have different divisions or regions (or sales reps or departments), how profitable is each one?
- Who hasn’t paid me?
- Are my internal business processes efficient or are we duplicating work?
- Who has inquired about my business that I need to follow up on?
- Which leads are the highest priority?
- Will we have enough money to pay our staff and suppliers on the 20th?
If you don’t know how to answer some or all of the above questions you’re not alone? Sooooo many business owners don’t, and would really like to know, but don’t know where to go to for help and even feel embarrassed about not knowing. (Hint: I’m friendly and non-judgmental, you can come to see me for help)
In order to get meaningful business information, you need to have systems in place to capture the information accurately and efficiently.
Your accounting software is a good place to start.
Far from it being solely for listing bank account transactions so you or your accountant can process your GST and end of year taxes, your business accounting system can provide you with a goldmine of useful information about your business, once set up correctly.
It can be tricky to get right and you may like to call in an expert (Hint: that would be me!) to help you set it up in a way that will capture the information you want to know.
Like anything what you put in will determine what you get out, but time spent up front setting up tracking categories, jobs or classes (the various software brands use different terminology), along with diligent, ongoing data entry, will pay off when you know exactly what’s going on in your business.
A year later is too late.
A lot of small business owners don’t get any financial information about their business until 3-12 months after the end of the financial year when their accountant sends them the financial reports from the previous financial year. At that point the relevance of it has somewhat diminished.
Even then many say they don’t really understand their business financial reports.
How often should I look at my financial reports?
If you’re in business you should be looking at your financial reports at least monthly, and other business information more frequently, even daily.
If you don’t understand your financial reports, or don’t know how to get the reports you need from your business systems, ask your friendly business consultant, (hopefully that’s me!!) to explain them to you in plain English.
For bookkeeping terms that every business owner should know check out my post on this subject.
CRM’s, job management software, time-tracking apps, and other business systems.
There are a multitude of business systems and apps available now to track whatever you want to track, and the information they provide is valuable when making decisions that affect the future of your business.
Your accounting software is a good place to start, because the numbers tell the story of your business. But after that you may find it useful to set up other business systems to improve the efficiency of your processes and the accuracy of your information.
Help with your business systems.
If this has resonated with you and you want to get more meaningful information about your business so that you can make better business decisions, contact me for a chat.
I’m Certified in Xero, MYOB, Reckon and WorkflowMax, and I’m a trained business coach with IndeCoach.
I’ll help you to decide what is relevant data as it pertains to your business, I’ll help you set up the systems to capture it, and I’ll talk to you in plain English about the results that you are seeing and what you can do about them.
0800 HEADSPACE (432 377)