Why entrepreneurs and CFOs should adopt a new wave of financial analytics
Reading time: less than 2 minutes
This topic should appeal to business owners who recognize that active financial management is crucial to the growth of their business.
I share a familiar example — quick analysis of the company books — using a new genre of digital tools, which complement the traditional cloud accounting packages.
Why accountancy packages are not enough for scale-up businesses
Businesses are expected to keep good records of their finances. Those records are the source of essential reporting and feedback for management decision-making.
We have found that organisations use both accounting packages and spreadsheets in tandem, but not necessarily in harmony.
There is a frustrating gap in financial control between online accounting packages and spreadsheets. This limits an organisation’s ability to optimise its use of working capital.
And, as we all know, without using our working capital wisely, we cannot grow the business to reach our target.
You’re almost certainly wasting time and money
As a business owner, you may think you have this problem solved by purchasing management accounting services from your accountancy provider. That shifts the responsibility to the professionals. But, it won’t cover a class of financial processes that sit with your leadership team day-to-day.
Your service provider may be great, or not so great. However, your ability to move to another provider can be a headache. That brings inertia. Inertia leads to an “adapt to survive” rather than “innovate to thrive” mentality. Speak to your staff, and find out just how many hoops they have to jump through to get “that report on your desk.”
In short, don’t expect your service provider to offer the level of analytics that may be carried out in-house by your leadership, and which consume your staff’s valuable time.
A cloud-based approach to great financial management
Accounting cloud software provides practical constraints around financial data, while spreadsheets deliver flexibility. One’s strength is the other’s weakness.
Unfortunately, that doesn’t make this duo the perfect team. They can, all too often, conflict with each other. This may give a confusing picture of the organization’s financial health.
If you find yourself trying to reconcile data between different sources, and starting to doubt your sanity, then you are feeling what I am describing.
You know the pain. I’d like to share the solution which made me into a very happy bunny. If you’d like my very happy bunny solution, then please sign up for our email, so that you don’t miss next week’s article. I’m sharing a simple, quick and efficient methodology that I developed. It is designed to help organizations manage data quality, preparation of finances, management visibility and financial controls.