Today, micro, and small businesses have access to affordable, timely technology that can help them improve operational efficiencies and surface useful data from within their business, to assist in decision making.
The first step is to identify what information would be useful to the business. As the business grows and evolves, continually circle back to review the data is still useful in helping them achieve their goals.
From an accountant's perspective, the next step starts with using an online accounting solution such as Xero or QBO. Within these packages, there's a lot of feature-rich functionality that business teams should ensure they're fully utilising.
The chart of accounts the backbone of accounting systems, needs to be a useful representation of business activities, and reporting templates should be designed and structured to offer different levels of information, for relevant parties. From there explore if defining features such as jobs, categories, or projects can be overlaid across reports to assist in monitoring key drivers.
For many micro to small businesses, popular online accounting solutions offer enough reporting features to support them to make informed decisions about their business.
The advantage of using an online accounting solution is they can integrate with and sync with other online business solutions. Workforce Management, Customer Relationship Management, Inventory Management, the list goes on. It’s likely that these solutions offer some analytical reports. For businesses that want more than standard reports to help the business understand and use their data there are many specialised Business Intelligence & Management Reporting solutions and tools.
Exporting and Manipulating Data in Spreadsheets
Xero and QuickBooksOnline both offer the ability to export into Microsoft Excel and Google sheets. You could use a tool like Data Dear to export data from the solutions into Microsoft Excel. Manipulate them in Excel to your nerdy heart's content. If required upload the data back into the accounting solution or use the reports, such as grouped consolidated reports to present to the management team.
Many data lovers like to manipulate the data in Microsoft Excel and utilising this tool gives them the best of both worlds. They can update data naturally within the small business Accounting solution at the press of a button or update their Microsoft Excel templates.
Cash Flow Management and Forecasting
Amid COVID-19, one of the most needed financial activity is cash flow forecasting. Understanding how businesses are impacted by the lockdown, how companies can review income opportunities and expense reductions, and how the tax stimulus will impact them. Some accounting solutions have simple cash flow forecast built into them. For a robust focused solution, try something like Float Cash Flow Forecasting. It syncs with your online accounting data and provides the opportunity to develop cash flow forecasts and scenario planning from which to make informed decisions and proactively develop cash management plans.
One of the positive outcomes of this terrible pandemic is businesses are adopting good cash flow habits. I've seen businesses shake off the fat and after the initial disruption they’ve turned around and are now more profitable.
Regular cash flow forecasting can help businesses recognise improvements opportunities and proactively manage finances.
Plug and Play Reporting Solutions
If you're looking for an out of the box business intelligence solution that offer templated colourful graphs, reporting, forecasting, budgets, dashboards and consolidation, there are some solutions that provide plug and play functionality. Spotlight Reporting, Futrli and Fathom. Of note, Fathom is a fantastic global technology success story based out of Brisbane.
If you don't interpret numbers naturally than colourful graphical representations, and customised dashboards may assist you in analysing and interpreting business trends.
Microsoft Power BI
From here, the next step up in Business Reporting for the small business space, is Microsoft Power BI. It's like Excel on steroids, with hundreds of data visualisations options built in and the ability to design produce relevant dashboards for different roles and responsibilities in the business. For example, a top 10 segments leader board or automated daily operational performance emails. All the functionality you love in Excel with the ability to integrate across multiple online business solutions, enabling a holistic view of business data.
Reach out for expert help
A micro or small business may not have the in-house skills and expertise to roll a solution like this out. I’d encourage you to reach out to your accountant or bookkeeper or someone offering CFO services, to assist in implementing suitable management reporting information to help you drive your business.
Also, many of the tools or solutions mentioned have online training, and partner programs of which you can find experts to assist you. When it comes to the Microsoft Power BI solution you could nudge your accountant to use a solution like Etani Business Platforms, which means the end cost of the solution is much cheaper for you.
Did you notice how through this article I always reference informed decisions? After working in the Business Intelligence world for many years, I recognise and acknowledge there are outside factors such as understanding of the landscape and gut instinct that should be embraced when making informed decisions. I believe in quality data, but it may not tell the full story.
Shortly after graduating from Griffith University, I started out my career managing a 40 million-dollar fast FMCG portfolio in the UK. I used Lotus 1-2-3, and it’d take me a month to produce a profit and loss and the accompanying profit in the loss analysis to budget reports. Today with the right systems in place that data could be accessed on almost a daily basis, at a much lower cost, and I could be monitoring it from my home office in Brisbane.
This insight would enable the business to make timely informed decisions and quickly respond when needed.
Businesses are the result of many decisions along their journey. It’s when they’re consistently making the correct informed decisions, for their circumstances that they can achieve an optimal successful outcome. What’s exciting is small businesses can access affordable robust business intelligence and management reporting tools now, to assist them in making smart informed decisions.
Meet the author
Heather Smith (Class of 1989)
Changemaker. Socially responsible. Incurable optimist. Community leader. Heather is the only Australian named in the USA’s Accounting Today list of 21 people helping shape (and reshape) the accounting industry in 2020 and beyond. Described as the “Beacon of the cloud accounting industry”, she educates the community about Accounting Technology through nine books, including Xero for Dummies, an newsletter (subscribe: HeatherSmithAU.com), Cloud Stories podcast, YouTube, webinars, panel participation, and presentations.
