Interpreting the Numbers, the Real Key to Better Business Decisions
A better understanding of your numbers will help you make better business decisions to take your business to the next level.
In our firm, we are privileged to work with a wide variety of clients. Some bring their paperwork into us in a shoe box and say, “Here you go, you can sort that out. We’re out of here!” At the other end of the spectrum, we have clients who are working on cloud accounting systems and reconciling those systems every single day. The benefit of this real-time access is that wherever they are in the world, they can look at a snapshot of exactly what’s happening in their business at that moment. They can run profit and loss accounts, create a balance sheet, look at their cash position, and have some certainty around the financial statements of their business.
That’s a wonderful feature to have at your fingertips, but here is the kicker. Just because you have the numbers doesn’t mean you understand what those number mean to your business. Setting Key Performance Indicators (KPIs) will assist you in interpreting those numbers.
Let me ask you a question. What are the 6 to 8 key drivers of revenue, profits and cash for your business? Are you fumbling to come up with an answer? Don’t feel bad. Unfortunately, very few business owners can answer that question quickly and succinctly. Most say, “That’s not something we’ve thought about, but they would be interesting to know.”
Essentially, once you understand what those key numbers are, you can take those financial statements and translate them into specific actions that will impact the success of your business. Once you set up those 6 to 8 key drivers, or “key performance indicators” (KPIs), you can track and measure them on a weekly, monthly, or even daily basis if needed. Then you can see clearly whether your business plan is on track or not – whether your meeting your goals or not!
If you feel that you might not be quite on top of the numbers in your business as you’d like to be, let’s talk. We can look at your specific business and help you put a plan together to set goals, KPIs, and help you interpret those numbers to build your business. Once these are in place, you can go back to doing what you love to do most – running your business. Call us, Bressler & Company, today at 559.924.1225.