Business insights are the glimpses you get into your business based on the data produced, pulled and reported. Traditionally, the small and medium business relies upon financial statements, produced no more frequently than monthly and often 15 days behind the last day of each month. These financial statements are extremely important and they certainly have their place. However, let’s face it, data this far in arrears is not of the highest value to your business for daily operations.
There is plenty of data available from your business, but not all data is necessary, or even helpful. In fact, the wrong data can be quite detrimental leading you to make incorrect assumptions.
So, this begs the question, how to determine the right data? There are some standard data sets, or metrics that are important to every business, such as cash balances, working capital and revenue. What else is important? Have you considered what drives your business?
Understanding the data that drives your results determines the business insights you need to monitor. How long is your sales cycle with each customer? Do you turn a merchandise sale in a few minutes, or do you have long-term service relationships that pay large sums over months or years?
Gathering these kinds of insights requires to you to lose the traditional financial reporting for daily operational decisions and get creative. Don’t measure and report because it has always done. Measure and report on what matters to your business.
We hope this post challenges your definition of financial metrics and opens up new horizons for business insights in your business.
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