51% of small business owners feel anxious about managing their finances.
 
(According to a survey by Xero, a cloud-based accounting software company.)
 
It’s time to simplify, especially if you don’t have a background in finance or accounting.
 
Do you find yourself drowning in a sea of financial data each month, unsure of what it all means or how to use it? You’re not alone. Many business owners receive huge reports from their bookkeepers that feel like data vomit, leaving them with more questions than answers.
 
Having data is one thing, but understanding it is another. If you’re holding a bunch of meaningless data vomit, what good does it do? It doesn’t tell the story of your business’s performance, and it can be frustrating to sort through.
 

Here are five critical steps to simplify and amplify your financial data:

 

  1. Quality Over Quantity: More data isn’t better, it’s just more. Focus on meaningful data that paints a clear picture of what’s happening in your business.
     
  2. Start with a Vision: Envision how this data will help you answer key questions about your company’s performance. How did you perform last month? How does this year compare to the prior year or your budget?
     
  3. Measure What Matters: Identify the key metrics that drive your business and focus on measuring those. Look for the drivers and levers that you can control.
     
  4. Structure Tells the Story: Use a structured chart of accounts that allows you to get summarized versions and drill down when needed. Design your reports to be insightful and compare them against assumptions, expectations, and trends.
     
  5. Consistency is Key: Ensure consistency in how you record data. This will help your numbers tell the story of what happened during the month.

Simplifying your financial data can transform your business into a data-driven organization. When you use data to make informed decisions, you can move your business forward with confidence.
 
Whether you’re tracking conversion rates, labor utilization, or revenue, simplifying your financial data will strengthen its accuracy and insight. These principles apply to organizations of all sizes and industries.
 
If you’re ready to take the mystery out of your finances and amplify your decision-making ability, reach out to us.
 
We can help you simplify your financial data and turn it into a valuable tool for your business.
 
 

 

Your CPA Shouldn’t Be Your CFO!

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