Dene Paquin explains what quality data can do for your business. Originally posted on the Intuit QBO website. ~WizeOwl
Working with small businesses on a daily basis, I have seen first-hand how easy it is for business owners to pass up valuable opportunities on the foundation that they are “just too busy.” This is especially relevant when it comes to reviewing and understanding a company’s financial data.
As technology becomes more prevalent in the accounting space, it is becoming increasingly easier to document and track detailed financial information. Even more recently, tools such as chata.ai, QuickBooks® Assistant and Spotlight Reporting help business owners mitigate risk and properly strategize for the future by offering understandable financial data.
The Gap Between Expectation and Reality
In any business, the numbers always tell the real story. Investor confidence, the illusion of high sales and positive trends from one month to another can’t always paint a true picture of what is really going on behind the scenes.
While it’s assumed that most business owners and executives have their finger on the pulse, that’s not always the case. One study performed by Fuqua School of Business at Duke University surveyed 400 chief financial officers at major U.S. firms about their expected Q3 2017 performance. While a majority of those asked indicated the likelihood of a very strong quarter, reality was very different: many CFOs missed concerns beneath the surface that contributed to overall weak performance.
Why Quality Information Matters
Accounting is only one small part of managing the financial side of a company. In fact, large companies have an internal financial planning and analysis (FP&A) department for a reason. This team of professionals works together to identify which pieces of financial data are actually important, highlighting business drivers, identifying inconsistencies and supporting leadership in making plans to mitigate challenges. This kind of analysis can provide warning of issues before they arise, helping executives to determine failing lines of business while providing a roadmap for the future.
Insight into what matters and what doesn’t can be a huge leg up, helping decision makers to determine where costs can be cut, understand detrimental variances to the budget and keep the business operating like a well-oiled machine. In a small business, however, there’s generally no room in the budget for an FP&A team, leaving business owners without this robust resource during the analytical process.
Identifying the Best Information
The value in the right financial data and metrics is certainly notable, but making this differentiation is often easier said than done.
The right accounting software is a great first step, providing an easy way to generate effective financial statements that can be used for analysis. Statement generation is only as valuable as the analytical tools available, however, and for business owners new to reading and interpreting reporting, it’s easy to let little details get lost in the shuffle.
Accordingly, the right supporting services can make all the difference. Chata.ai, for example, provides automated solutions for accessing, searching and analyzing business data through unique integration with QuickBooks Online. Rather than digging through records and looking for a needle in a haystack, users can ask simple questions in exchange for immediate answers.
Quality data matters in virtually every field, but better financial information is extremely critical in running a successful business. When information overload takes over, it’s easy to allow the biggest risks to fly under the radar. With the right tools, however, it’s possible to efficiently sift through the rubble, allowing the most vital bits and pieces to rise to the top.
Want help getting (and understanding) quality data for your business? Ask Bizwize today.