Are you Using These Five key Business Reports to Grow Your Business?

Raffingers Insights | Business Reports

Technology has advanced so much that long gone are the days when all you can generate is a profit and loss report (P&L). Although essential for the success of any business, there are now so many more business reports you can run and consequently more insights you can get into your organisation, that it is criminal not to make use of them.

Below are the five key business reports I recommend for any director looking to grow or have a tighter handle on their business’s performance.

  1. Operational Forecasts

Where do you see yourself in two, five or ten years’ time? Accurate and up-to-date forecasts enable you not only to visualise your business’s future, but will show you what is attainable and will help you to develop operational and staffing plans geared towards your future goals.

Running a business is never plain sailing and it is impossible to predict every eventuality, (Brexit anyone?!); however, having an accurate forecast in place enables you to build in contingencies and keep your business protected as best as you can. The ideal way to achieve this is to forecast weekly. This will enable you to constantly tweak your forecast to reflect the current market, new competitors and peaks and troughs in your business.

  1. Three Way Forecasting

Your business needs so much more than a P&L report. Although this gives you a great indication of how your operations look, it does not show you clearly the relationship between the P&L, balance sheet and cash in your business. Profitability does not always equal cash. You need to know when your cash inflows are. Through seeing these three key points visually you can achieve more advanced insights, such as whether your receipts exceed your payments and single our costs that are eating up your profit.

The key cause of business failure is not having enough cash in the business. These forecasts enable you to see how sustainable your business is and give insights that basic P&L reports simply cannot do.

  1. Scenario Planning

If you are looking to grow, what is the best way to do this? Should you take on a new employee?  Should you increase the services you offer? Do you have the capacity to grow into a different region?

Scenario planning enables you to see into the future. For example, taking on employees is a gamble, yet with scenario planning, you can see when the best time is to hire and how many people you can realistically hire without stretching your cash too far. Whatever ideas you have, scenario planning helps you to see if they are worthwhile and achievable before you commit time and money into putting your plans into action.

  1. What-If Scenarios

What-if scenarios allow you to tweak different variables and elements of your business to measure your performance. As with any business, there will come a time when you need to make a difficult decision; what-if scenarios can provide you with clarity on the options available to you and how your business will be impacted depending on which option you choose. For example, if you are negotiating prices of your stock, you can create multiple scenarios to see how your profit will be affected. You can even see how your business will be affected by sales remaining steady, projected growth and projected loss.

Through access to this data, you can be confident in your business decisions.

  1. Alerts

It is all well and good having up-to-date business reports, but you need to ensure you are tracking them and using them to benefit your business. Alerts are the best feature of reports that can keep you focussed and ensure you do not miss any negative impacts or opportunities. On all reports you can set alerts that notify you when something significant happens, for example if you are over trading and are not getting enough cash in. Something all businesses need to take more control of if they wish to succeed.

In this instance, you can set up alerts for cash and get notified if your bank goes below a set level or if any costs increase. Through alerts you can be confident that your business is protected and you will have enough time to respond should you get into difficulty.

If you are serious about growing your business, there is no excuse not to have up-to-date reports. There are now countless pieces of software that can help you achieve all of the above, such as Futrli, allowing you to set up reports and forecasts without taking vast amounts of time to do so.

For help creating business reports and forecasts for your business, contact me at lee.manning@raffingers.co.uk.