In the next day or so you should have your results of January 2022. Your Profit and Loss and Balance Sheet reports should be reflective of what happened during the month of January. If you don’t have access or use these reports to get a view into your organization’s progress, then now is the time to create the discipline to do so.
With the level of technology, we have in today’s business world, your finance department or if you are a smaller business – you should have the details of your most recent month of data entry into your financial system by the 5th and no later than the 10th of the following month depending on when the days of the week fall. This is where the discipline starts. The collection and entry of data into your business system. If you craft a method by which data is entered on a recurring and regular cycle, then at the end of the month all you are doing is cleaning up the few open pieces of data.
As a leader you not only need to know where you are headed but you also have the obligation to the team to know if your progress is taking you on the correct path to arrive at your desired outcomes. Many small business leaders are all about the future – sales, marketing etc. I can’t disagree that these are not just important but critical to feeding the profit machine of your business. Unfortunately, if all you look to is the future and not at how you are actually delivering the results then you could very well be simply replacing time and money repeatedly. No actual profit or progress.
We will visit sales and pipeline a little later this month because it, as mentioned, is critical to the growth and sustainability of your organization. I do want to remain focused on the need for you to build the discipline to review actual results and compare it with budget/projected and the trends which are showing changes that impact your cash.
If you are not already doing a monthly review, then it will take a bit of commitment to get the review system set up – primarily in the data collection and entry side of the process. Once you have the data being captured and entered you can move to focusing on what the data is actually telling you. Rather than simply looking at numbers that are either black (positive) or red (negative) you start viewing the data through the numbers and not just looking at them. This allows you to see the shift in cash taking place before it becomes a larger issue.
This week ask yourself if you had a board of directors and they required you to come before them on the 10th of each month and update them on progress of the company, would you be able to do it? Would you be able to withstand the questions about one area is up and another down? Would you understand the impact of a wrong classification of dollars and the eventual problem that causes for forecasting?
As you build your business, you must build the disciplines to have the systems in place to allow you to sustain and scale your business. If you don’t know what you have accomplished and see the trends of that effort you are guessing as to whether you are headed in the right direction.
Looking to get your business to the next level by scaling the right financial numbers? Give JKL Associates a call to schedule a no obligation conversation. – In Michigan (313) 527-7945 or Florida (407) 984-7246.