It's What's Up Front That Counts

Sydney Outsourced CFO Thomas Taylor - Sunday, September 03, 2017

There is that old saying that "if you what to improve something, first measure it". And if you really want to know what's going on in your business you can't just rely on your accounting system. 

Some of the data you need will be there but not all of it. The most important information will live in your front of house system / CRM, but you usually need a cocktail of data from at least two systems plus some old fashioned cost accounting principles.  

The building blocks are usually small amounts that can be grouped in helpful ways. For example, service businesses need time and billing information from front office combined with salaries and on costs. SaaS businesses need to track the acquisition and delivery costs of recurring revenue. Recruiters income and direct costs per desk.

Your goal should always be to track sales and margin by income stream, but also by products, location, clients, teams, etc etc etc. It's way too hard to split the costs in multiple ways in an accounting system. They are just not designed for it. They are designed to add things up the same way each time, perhaps two ways at the most. 

Most businesses will have dozens of spreadsheets done over the years that attempt to do this but spreadsheets are too unstable, error prone and complicated. So, despite the best of intentions, they usually get abandoned. After a while, new attempts suffer the same fate.

Even if you know what you are doing it can be a massive undertaking in a spreadsheet. It took the COO of one of our clients three days a month.

The solution, we like, is to use business intelligence software. We can take data from your billing system, your CRM and your accounting system and slice and dice the data is really cool ways. It works the same way every time but it's also incredibly flexible. The client gets us to do their reports, they get them every week, in a few hours, and the COO gets to use their time to run the show, not crunch spreadsheets. 

 

 

 

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