In 2002, the Oakland Athletics reached the playoffs of Major League Baseball after spending $44 million on salaries, despite competing against teams like the New York Yankees, with a budget of $125 million.
The way they did it became legendary.
Their general manager, Billy Beane, realised that most teams were picking players based on gut instinct. They gained a general impression of a player’s strengths and weaknesses by watching them play, and made a decision accordingly.
By contrast, he placed used detailed analysis of player stats or data in order to assemble the very best team. This intelligent approach to competing changed baseball forever. Thanks to Billy Beane, delving into player stats in order to make more considered decisions – and improve their performance – has become standard.
If you’ve ever watched the movie Moneyball with Brad Pitt – or read the book on which it’s based – you’ll already know all this.
But there’s a connection to your business, as well.
You see, many business owners also make financial decisions based on their gut feeling. They believe they know how their business is performing, but without concrete data and analysis, it’s difficult to make accurate assessments. Just like in baseball, football and other sports, relying solely on gut instinct may lead to missed opportunities and potential losses.
This is where monthly management accounts come into play.
Just as Billy Beane used player stats to gain a deeper understanding of their performance, monthly management accounts provide you with a comprehensive view of your company’s financial health.
With monthly management accounts, you can track key financial metrics such as revenue, expenses, profit margins and cash flow on a regular basis.
These accounts provide you with real-time insights into the performance of your business, allowing you to identify trends, spot areas of improvement and make informed decisions.
By analysing your monthly management accounts, you can uncover valuable information about your business’s strengths and weaknesses. For example, you might discover that certain products or services are driving the majority of your revenue, or that certain expenses are eating into your profits more than you realised.
Armed with this knowledge, you can make strategic adjustments to maximise your profitability and overall success.
And you can forecast and plan for the future. By identifying patterns and trends in your financial data, you can make accurate predictions about future performance and plan accordingly.
In short, you can stack the game in your favour. It’s Moneyball all over again!
Corporates take monthly management accounts for granted because they’re so useful. But chances are, if you’re turning over around $1 million or $2 million, that you don’t get monthly management accounts…
“Regular” accountants don’t provide them, and if you’ve never had monthly management accounts before, you might not even realise you need them.
Other companies this size think they get monthly management accounts… but they’re mistaken.
If the monthly report you receive doesn’t actually help you manage your business better, they’re not true management accounts! They’re just… accounts.
That’s where we can help. Our Outsourced Finance Department can help you set up and maintain monthly management accounts, ensuring that you have the information you need to make informed financial decisions.
We can also help you interpret the accounts – and even make decisions based on the information – so that they become an invaluable management tool.
If you’re interested in learning more about how monthly management accounts can benefit your business, please get in touch. Simply hit ‘reply’ to this email or call us on 01279 647 447, and let’s arrange a time to talk.
Warmly,
Garry ‘Billy Beane’ Mumford
