Why You Need Better and Frequent Business Reporting

29 Aug 2022 | Biz Strategy

There’s a saying; “If you don’t know where you’ve come from or where you are, you can’t get to where you’re going”. This nugget of wisdom can be applied to navigating any journey from point A to point B, but it is especially true for your business. If you want to lead your SME or non-profit organisation to success from where you are now, are you certain you know how to steer the rudder of your ship in the right direction?

You may not consider it your favourite activity, but business reporting is the treasure map you need to keep you on track and aligned with your goals. It documents a record of historical data to empower you to budget and forecast confidently when planning for the future.

From knowing what the most and least profitable services or products are, what activities are a waste of time and money, trends in the market, to what customer niche is your ideal target – all of these insights help you make informed decisions rather than winging it and hoping for the best.


Frequency Matters

How often should business owners review their financials? Are year-end reports enough?

Business reports are documenting historical data of a particular period. The numbers tell a story of how your business performed and the financial status of that time range.

If reports are only prepared annually, for instance, you are looking back on the previous year while moving full stride well into the following year. And we all know a lot can change from one year to the next. To make decisions based on current events, you need business reporting that reflects where you are at now, not last year.

Reports will empower you if they are analysed regularly and soon after the period being reported on. With frequent information ‘hot off the press’, you’ll know where to pivot and quickly adapt operations for better outcomes in future periods.

Not in the habit of frequent business reporting, or don’t have the time? Take a moment to read our blog Why You Need to Work On Your Business – Not In It to get a refresher on why it’s necessary to step out of the trenches of micro-managing and focus on planning, goal setting, and performance tracking.


Key Performance Indicators

KPIs are both financial and non-financial and they evaluate the performance of a range of business activities such as services or products, programs, or marketing campaigns or events. They provide measurable value to help you understand if you’re spending time, dollars and resources on the right strategies or tasks to achieve your goals. By tracking KPIs, you can evolve with the market and understand the trends, which could highlight opportunities to leverage.

Examples of common KPIs of various time periods include:

  • Net profit: Increase or decrease of revenue for a certain product by 5% from last month or last quarter.
  • Online traffic: Increase or decrease in traffic to the website by 10%.
  • Social media marketing: Increase of followers by 200, or 385 new video views.
  • Staff turnover: Increase of employee turnover by 15% this year compared to last.
  • Performance of other events, such as webinars, specials, or a charitable campaign.

The value of KPIs is how they influence your decision-making process so you can consider various options, (by knowing what happened before), to predict the consequences of future actions.

Asking key performance questions (KPQs) such as the following will also help you stay on track:

  • What result or outcome do I want to accomplish?
  • Why is achieving that outcome important, and is it really a priority?
  • How can I define progress or spot obstacles?
  • How will I know I’ve reached my goal or achieved a positive outcome?

Team-Building Tip: Delegating the tracking of KPIs is a great way to engage your team so they feel invested in the success of the business. It can also open doors for opportunities you might otherwise have missed. See our blog about the benefits of involving your team and the skill that makes a good leader great – When Great Minds Don’t Think Alike, Exceptional Things Happen.


Ensure Your Business Reports are Customised

Business reporting is not dealing with objects, it is dealing with relationships between objects.” – Hasso Plattner

Reports shouldn’t be confusing and leave you frustrated. They must be easy to understand and provide insights relevant to your business. Investing in the right accounting software is a must, and we recommend Xero as the top choice for small to medium businesses and non-profit organisations. It provides a wide range of reports and allows you to measure specific KPIs to give you a thorough understanding of your business performance. And if you want more customisable and interactive reports, then using an add-on like Spotlight Reporting is a great option.

Regular business reporting will help you lead with confidence and navigate your business to achieve your goals. Need help with setting up your reporting system and understanding your numbers? Professional support is just a click away! Contact the team at BW Miller Dean to learn how we can help you design your business for success.