It’s often said that data can only tell you what’s already happened, not what’s going to happen. That may well be true, but it certainly drops some pretty heavy hints. If you want to plan for a more profitable future, looking at the details of past financial performance will tell you a lot about how to get there.
Ambitious business owners are quite rightly preoccupied with the future. They’re not ones to rest on their laurels because they’re focused on looking forward to their next success. This often means taking calculated risks and judgement calls.
So the first question is: how big is the risk? And if you can quantify it in financial terms, is it a risk your business can afford to take? Historical financial data will help quantify the risk. Your current financial reports and forecasts should tell you whether that risk is a viable one.
If you have detailed financial reporting in place, you’ll have a more accurate picture of how much it really costs you to do certain activities and look after different customers. Any business plan you put together will be improved by basing it on accurate, detailed and verifiable data.
How Detailed is Your Financial Data?
Finance directors often have the reputation of being the person who’s always telling you not to spend money. That’s not really how it works.
Rosy Jeffery Accountants acts as a virtual or fractional FD for many smaller businesses. We see our role as helping businesses avoid wasting money and also to deploy their financial resources as effectively as possible to support growth.
A large part of this is ensuring that financial data recording and reporting are set up to deliver the insights you need to understand the present and plan for the future.
There’s no data for the future, so make sure you glean all you can from the past.
If you’d like find out more on setting up your business finances to support a more profitable future, contact us here or call us on 01297 639457.
