What's worse than not knowing your numbers?21st May 2018
You are anxious to get more leads into your business, so you run a report on where business has come from over the past 24 months.
The data shows you that more leads came from cold calls than from anything else, so you invest a significant sum expanding your cold calling team.
The only problem? The data was flawed. In fact, your best leads all came through email marketing. But that’s an area you cut in order to pay for your new cold callers.
You can’t understand why business suddenly dries up over the next six months………
The scenario is made up – but unfortunately, all too realistic.
Over the past couple of weeks, we’ve been discussing the danger to your business, if you do not track your Key Performance Indicators. Without solid data, it is hard to know what’s really going on in your business – and to make good decisions.
In fact, there’s just one thing that’s worse than failing to track your business’s KPIs: Tracking data that is wrong.
It happens the entire time. According to a report by research company Gartner, at any given moment, 40% of a business’s data is missing, wrong or incomplete.
This may be because your employees enter wrong numbers. They may be recorded manually – a recipe for disaster - systems don’t talk to each other or there are no processes in place to double-check the figures.
The danger is that instead of your data helping you make better decisions, it leads you to make costly mistakes.
That same Gartner report shows that 40% of businesses fail to achieve their objectives because of bad quality data.
It’s vital, then, that you make sure that your KPIs are based on accurate, timely, robust numbers.
How do you make sure this is the case – particularly if you are not a ‘numbers person’?
The first way is up to your accounting team. The great principle of accounts is that everything must balance. You need built-in systems to always double-check this is the case.
So if, for example, you get a daily sales report as part of your KPIs, your accountants should check that the sales those reports show add up to the same figure shown in your management accounts at the end of the month.
The second way, however, is up to you.
Data is crucial – but you should never ignore your gut instinct. It’s often right.
Even though you may not be at close to the coalface as you were in the early years of your business, you are still best placed to know when the figures don’t stack up. If something feels ‘off’, it warrants further investigation.
Of course, that is not a safeguard you should have to rely on.
As your outsourced finance department, we have robust systems to ensure that the figures on which you base your business decisions have been double- and in many cases triple-checked for accuracy. Your accounts are ruthlessly – even obsessively – balanced and there are stringent controls in place.
You can be 100% confident that the numbers you are looking at are correct – and therefore safe to base decisions on.
Just hit ‘reply’ to discuss how we can help you get the data you need to grow your business.