Small Business Advice

Monitoring Business Performance

05 Apr 2017

We are regularly asked at Accounts & Legal: how can I set my business up to succeed? And for us the answer usually includes as a major factor analysing, monitoring and improving business performance.

If a business owner can’t see how their business is performing, how can they make the necessary adjustment to focus the business or assess how a particular strategy is working (or not working)?

Quality data - The right systems for your business

For us the answer to “how to monitor business performance?” almost always starts with putting in place systems that allow the business to gather quality data and pull reports quickly and easily. We recommend using cloud accounting systems that offer fast accurate access to performance data that can be viewed anywhere anytime.

Depending on the business we might recommend a range of systems that will certainly look at financial performance but may well dive into other areas of the business for example, how the business deals with stock, or how it manages its debtors and creditors or even how a business deals with timing differences between when it invoices for a piece of work and when that work is paid for.

As platinum Xero partners we work alongside our clients to ensure that our clients fully understand how to use the Xero system and how to leverage that system to deliver quality reporting at all levels of the business.

Monuntian

Quality reporting  - management accounts that are set up to report on your business

Once the systems are in place to record data accurately we work with our clients to build a set of management accounts that analyse and report that data in a way that is useful to the business. What management accounts contain changes from business to business and could involve analysis around revenue generation, direct costs or overheads as well as interrogating how a business is managing its debtors and creditors over time.

Management accounts (if done in the right way) can become a key component in monitoring business performance presenting metrics and operational indicators in a way that will allow directors and stakeholders to effectively interpret where a business has performed well and where additional focus needs to be placed in order to deliver results.

Mountain Man

Business forecasting - spotting trends, problems and opportunities

The flip side to the question of how to monitor and interpret business performance is the question: What constitutes good or bad business performance?

When considering business performance, it is always essential to look at the business goals and ask the question: what are the business’s targets in the short, medium and long term? Whilst these goals are typically put down in a business plan at Accounts & Legal we work with our clients to breakdown these goals into tangible metrics through financial forecasting.  Good business monitoring can also help to identify a good time to consider selling your business for the optimum value. This can then be monitored and assessed as the business grows and develops. Forecasting should ultimately become the benchmark upon which a business performance can be assessed.

Get in contact to find out about the affordable and practical services we offer for business monitoring, oversight and reporting.

Keir Wright-Whyte

photo

Managing Director

0207 043 4000

About the author

Originally graduating with a degree in geography from Edinburgh University, Keir claims that he was then tricked into becoming an accountant by one of the UK's top 5 accountancy practices.The deception extended to the usual training in audit and associated activities.

Keir subsequently worked in a number of advisory roles with clients including in the energy trading, pharmaceuticals and financial services sectors.

He loves working at Accounts & Legal because of the variety of work and clients, the excellent team ethos and morale, the importance placed on genuinely helping and being useful for clients and because he believes what he does matters to clients and helps the firm.

Keir's primary role is to ensure that new clients with complex businesses or needs are on-boarded in the best way and he is a "trouble shooter" both for clients and where complex issues arise internally. He also helps the accounting teams strive to improve what we do for clients, whether processes or services.

When not debiting or crediting, Keir has a penchant for fixing old buildings, skiing, surfing and cycling.

  

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