The past has passed. You look at it only to learn how to do better next time. In a fast changing world, that’s of limited benefit as you are unlikely to use any learnings very often.
The present you are stuck with. But you can change your future.
All that detail!
Accountants, sadly, are excellent at telling you what you have done, often in excruciating detail. We can analyse the accounts down to the amount you spent on pens if needs be. But here, we know our clients don’t value those details much, and then only if there is something they can benefit from immediately. Also this analysis tends to concentrate on expenses with a view to cutting them. You can only make a proper impact once or at best twice making cuts. After that you are spending too much time to achieve too little. No one appreciates information they can’t use. It wastes their time and their money. And seldom does it focus on making more money by making more sales at better margins. That’s why we don’t do much of that – just enough to learn from. It helps to inform our clients when they are thinking about their strategy, which is a high level, flexible planning tool.
That leaves a gap, because the detail in the monthly accounts needs to be matched with what is a forward looking, but broadly based strategy. We’ve been filling this gap with tailored predictive reporting to show what happens month by month if these trends continue and how that fits with strategy. It’s a bit long winded, and obviously has a cost, and we only do it monthly or quarterly.
It would be so much better to have real time predictive reports, which you can see every day. And under your control. So, as sales are made, cash comes in etc. you can see what the impact of the changes are, which will help your day to day management of the business and you can see how it fits with your strategy. An online tool could also track non-financial KPIs, such as numbers of sales appointments, matched to leads and sale values. If you record it, it’s likely it can be tracked and shown to you in a simple, easy to understand way.
Trialling a predictive tool
We’ve been searching for a tool like this for some time. We think we have found one, which we will be trialling. Whilst the tool works best with either Xero or QuickBooks online, it will work with most desktop accounting systems via an exported trial balance. There is an obvious prerequisite – your bookkeeping has to be up to date and good quality, or it becomes garbage in, garbage out. If all goes to plan, we will be rolling this out to all clients we think can benefit, cheaper and better than what they have now.
Real time information at your fingertips, as often as you think you need to look at it. It’s got to be the way forward.
If you would like to find out more or be part of this trial, just let us know.