Financial Statements provide critical insights about your business results. They include the Income Statement, Balance Sheet, and Statement of Cash Flow. Each statement should be reviewed for insights into what has already occurred. Consider them your report card. (If you are only looking at a single financial statement once in a while, you should consider at least a monthly review of all three.)
But where do you get insights that go beyond the financial statements? How can you keep a handle on your sales activities, inventory movement, point of sale results, cash receipts and more? While reviewing your financial results is one way to gauge your progress, there are other areas of the business that also require regular monitoring. It is important to review financial data and non-financial data and to combine the two for insightful comparisons. You might want to evaluate revenue per employee, cost per square foot, or revenue per marketing campaign, for example. These are the kinds of metrics that can help you make corrections in your results before you reach the end of the month. Look for custom reports and dashboards to help you bring this kind of important information together in one place.
Whatever tools you use, we suggest a regular review of the following information – including both financial and non-financial results:
- Inventory Management – for product-based businesses.
Look at inventory turns by product, order lead times, and margin by product. Take note of your fastest moving products and those that are lagging behind. What is the ratio of goods in inventory to items sold each month?
- Project Profitability – for project-based businesses
Examine individual project profitability, percentage of completion and budget versus actual. Look for collection experience by project and make sure payments are not slipping.
- Departmental P&L
Review revenue and direct expenses for each department, looking closely at costs that are controllable by department managers.
- Sales Reports
Review your sales by customer, product, salesperson and division if applicable. Look to spot changes in trends as soon as possible.
- Lead Generation Reports
Look at marketing results, conversion rates, and activity costs for insights into investment effectiveness. How many proposals are generated each month? How many new emails are captured on your website?
By automating standard financial and operational reports, you can make it easier for leaders to support your business in achieving desired outcomes.
The team at KRD can help you review your systems, reporting, and desired information needed to support your leadership team so that everyone has access to timely and actionable insights that help move your business forward.
