Does your bookkeeper give you a huge report dumped from your accounting software for your monthly recap?

(It’s like a data vomit.)

When you ask a question about this month’s financial performance, do you receive a shrug of shoulders, an “I don’t know,” or a blank stare?

This is where simplification comes in.

We have so much data, but we don’t know what to do with it, how to use it, or what it means.

If we have a bunch of meaningless data vomit in our hands, what are we supposed to do with it?

That data doesn’t tell us anything. It doesn’t tell us the story of what happened in the business that month. We don’t have any way to translate that information into the financial and operational performance — there’s seemingly no connection between the two. And that can be really frustrating.

We need to simplify that data so we can amplify the story of what actually happened in our business during the month.

So here are 5 critical things to do when it comes to your numbers:

1. More isn’t better, it’s just more.

To me, that statement is really the crux of the issue. You don’t need a volume of data dumped on you.

You need meaningful data that paints a clear picture of what’s actually going on.

2. Start with the end in mind.

How do you envision this data helping you answer the questions of: How did our company perform last month? How did we do this year versus the prior year, versus our budget, versus other key markers?

3. Measure what matters.

Isolate what’s important to measure and understand. What are the biggies, the drivers? Look for the things you have control over and figure out what the levers are – the places where you can dial things up and down in the business.

4. Structure frames the story.

You want a structured chart of accounts (line items that show up on your financials, as detailed or summarized as you’d like) where you can get summarized versions and still drill down with the press of a button to understand some of the underlying factors that are accountable for whatever change there was in activity.

Restructure your reports for optimal visibility so your reporting structure can tell the story of what happened during that particular period. Then, design those reports to be insightful, measured against assumptions, expectations, and trends to see how the business is performing.

5. Be consistent.

There needs to be consistency in the underlying recording of the data. We can’t have expenses being recorded in two different places (like 9 months of rent going to the rent account and the other 3 months going to miscellaneous expense.) With some level of consistency in recording data, your numbers will tell the story of what happened during the month.

Bottom line: simplification lends itself to becoming a data-driven organization.

When you’re data-driven, you’re using that storytelling data to make informed decisions about how to move the business forward.

Apply all these concepts to get insightful and actionable data.

Whatever the important metrics are in your business, from conversion of prospects to labor utilization to revenue, they will become more accurate and insightful.

This applies to organizations of all sizes and industries.

Insightful data can be used by everybody.

So, if you’re ready to take the mystery out of your financials and amplify your decision making ability, call us.