business insights reporting

Nick Urry, CA and Managing Director of Dexterous Group, breaks down what Business Insights Reporting is and how it can help you grow your business.

 

What is Business Insights reporting and what should I be looking at?

In today’s data-driven world, we are faced with information from many different sources and it is difficult to know what is important and where we should focus our attention. We all want the facts at our fingertips – but, sometimes, there is too much data and it’s difficult to cut through it all to determine what is useful and what could be clouding our judgment.

First of all, what is useful to me, might not be useful to you; so it comes down to perspective. For the purpose of this article, I am focusing on the business owner.

What should Business Insights be to the owner?

To begin with, it has to be insightful! Ask yourself: is it telling me something I did not already know and adding value to me with respect to my ongoing business decisions?

As a business owner, you don’t have time to be across every single piece of financial information so you need to focus your attention on some crucial areas. Some key metrics that I believe most business owners need to closely monitor include:

  1. Cash flow
  2. Increase in new clients OR increase in products/services to existing clients
  3. Gross margin
  4. Net profitability

From a display point of view, insights reporting is generally presented in a graphical format so you can more easily identify trends, relationships, and variances in the data.

Why are the above important? Let’s look at them in a bit more detail.

  1. Cash Flow
  • Cash is king and this phrase exists for a reason. Many profitable businesses go into administration or liquidation if they suffer from poor cash flow.
  • Do you know how much cash your business needs to survive the next 30 days?
  • Have you stress tested your debtors in case they don’t pay you on time?

 

  1. Increase in new clients OR increase in products/services to existing clients
  • Do you have systems in place that tell you how many new customers you are bringing in, or when you are providing additional products/services to your existing customers? A CRM is a great tool to ensure you are capturing this information.
  • You won’t always bring on new customers. However, increasing products/services to existing customers can be as profitable long term.
  • Additionally, the increase in sales to existing customers provides two benefits:
    • Firstly, you’re increasing your overall sales which is great; and
    • Secondly, it’s a sign you are also doing well with your existing sales to this customer as they’re looking to you for more!

 

  1. Gross Margin
  • Do you know what it costs to service a customer? It’s imperative you know the cost to service your customers.
  • Imagine if your costs to service were greater than your revenue! Corrective action would be required immediately to identify what is causing this and then address.
  • A strong gross margin goes a long way to ensure you have a strong business.

 

  1. Net Profitability
  • The bottom line is often an afterthought. However, it’s important to reflect upon all the hard work that goes into driving other metrics in your financials.
  • You need to have controls in place to ensure you are alerted when major variances may exist and require action to ensure you can grow your bottom line.
  • Motivations for being in business vary but at the end of the day, every business owner wants to make money and so this metric is very important and easy to view.

 

Business Insights reporting drives decision making

Business Insights reporting should be informative and help drive decision making. So, ask yourself, do you walk away from your insights reporting feeling like you know how your business is performing?

At Dexterous Group, we specialise in Business Insights reporting and we would be happy to show you how we can create this reporting for you.

The hardest part for a business owner is deciphering what is key.

Book your free consultation today to see how we can help you with your Business Insights Reporting,
contact us by email
or call +61 2 9167 8880.

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