As a business owner or manager, you have to make decisions every day. Can you say, hand on heart, that you always know how to make good ones? Are you confident about them? Or do you sometimes feel you are flying by the seat of your pants?
The Information you Need
Most business decisions are based on management information, together with external data about the markets and the competition. While much of the external stuff will be collected randomly, you have much more control over the internal data. You just need to make your most basic decisions about what statistics and details you want, and how and when you should receive them, so that you will have the right information at your fingertips at the right time.
If sales of one product have suddenly taken off, while another is still languishing on the shelves, you need to know about it now, not in a month’s time. If a new customer is not paying your invoices, you have to get in touch with them sooner rather than later, and put a stop to the credit and the supply if appropriate. You have to know what is going on before you can do anything about it.
Structuring Data to be Useful
In theory, today’s technology should give you fantastic, instantaneous access to all the data you need. We’ve long passed the time of handing over scraps of paper to a bookkeeper every few months so we know how much VAT to pay. Knowing about your revenue flows, your profit and your available cash every day should never be a problem now.
But the information you hold will only be useful if it is properly managed and structured according to the needs of your business, and if it is readily accessible. While there are general rules you can follow about maintaining the quality of your data, every business is different, and different entrepreneurs do things in different ways. You may need to make a small investment in data quality software that will pick up inputting errors and maintain consistency, plus a good accounting system, efficient processes and the reports that work for you.
It’s a good idea to keep your experienced outsourced bookkeepers in the loop too, because they will have the objective viewpoint you may find difficult. They can help you interpret up-to-date information about your business performance, so you can make all your key decisions with confidence.