By Quentin Poiraud at ClicData
Reporting. Whilst often regarded as the boring side of running a business, the reality is that poor reporting can have a significantly negative impact upon a business’s health.
Two key metrics that almost all small and medium-sized enterprises (SMEs) will track are cash revenues and number of paying customers, however these are only part of the equation - these figures alone don’t paint a complete picture of a business’s health. Instead, all metrics that can contribute towards the company’s goals must be clearly tracked, monitored and updated - and in a format that permits all stakeholders and decision makers accurate visibility of company performance at all times.
To investigate whether UK SMEs are doing this, we recently launched the ClicData Intelligent Business Index, an examination of how real-world businesses monitor, analyse and manage their business performance. The results were more concerning than we had expected – more than half (62%) of UK SMEs admitted they have no insight in to the true health of their business.
With this knowledge, we have put together three top tips which - if taken seriously - will ensure your decision-making process accurately reflects business performance.
1. Implement live reporting to guarantee your business is making decisions on up to date information
If a decision maker is basing their actions upon a record of the company’s cash reserves that is a few weeks old, they may be acting under the pretence that they have more cash reserves available than they do in reality.
Our research found that as many as two thirds of businesses (67%) believe their decisions are based on up to date information, yet 60% of them also openly admitted they only update their business performance reports once a month. Businesses need to make decisions every day, and this disconnect suggests decision makers are turning a blind eye to a very real problem.
Intelligent businesses are turning to modern, real-time reporting platforms, which take advantage of modern APIs and web services for constantly updated data. This mitigates the potential for human error, which is all to easy when manually inputting figures in to Microsoft Excel spreadsheets
2. Make reports easy to access for all decision makers
Even if an organisation is tasking advantage of real-time reporting, this information is still only useful if all decision makers have access to it. Therefore, there is a clear need for SMEs to ensure this information is packaged and presented in a format that facilitates this.
Similarly, as different decisions can often involve different stakeholders, it is also crucial that these reports are easy to share internally. Only then can there be confidence that all members of the business have access to the information they need to take appropriate action.
3. Ensure those handling the reporting understand what they’re reporting
Our research found that a significant number of those tasked with reporting on business KPIs did not fully understand the figures they recorded (34%). As a result, these individuals often blindly inputted numbers from month to month without any appreciation for whether they implied positive or negative business performance.
Therefore, it is not only vital that businesses ensure their reports are providing the right information, in the right format, but that those handling the reports are fully briefed on why this information is being tracked. These individuals are often the ones working closest with the data and are well placed to pre-emptively notice negative trends.
It’s certainly time for businesses to sit up and take action, especially when there is so much at stake. No one likes focusing their time and attentions on reporting, but it is much better to proactively prevent these issues arising than wait until mistakes have been made.