Why is Accurate Data – financial and non-financial important for your business?

Data is the source of competitive advantage in the information age, and accuracy, needless to mention, is an imperative feature of data-driven businesses. Data can help businesses in several ways which include:

Revenue

Data can help in evaluating the overall performance of the business and can enable the identification of revenue trends in terms of which period has better turnover and higher revenue. Such trends can determine how strategy can be formulated. For instance, companies manufacturing frozen desserts may find that some summer months have higher revenue generation and may want to formulate promotional strategies to further increase revenue. They might also introduce promotional offers for other months where sales are low to encourage customers to buy.

However, businesses are complex systems, and multiple product lines are generally offered. Financial data can help businesses understand which product lines are generating higher profits, and which need to be discontinued based on their financial performance. As your local accountant in Dee Why and greater Sydney, we provide our clients with detailed month-end reporting and adhoc reporting that provides valuable insight into how their business is progressing.

Sales & Marketing

Sales and marketing data is essential for strategy formulation and implementation. This financial data can help to understand which areas need a focused strategy and how sales strategy needs to be tailored as per the patterns of financial performance. Sales targets can be created based on this information, and the sales funnel can be activated based on it.

As your local accountant in Dee Why and greater Sydney, we can help to break down your data in terms of segments, markets, or industries  and can also help managers or owners understand which areas are performing better, so that sales and marketing strategies can be developed accordingly.

Underperforming product lines can be identified, and if required, eliminated based on the insights generated from the data. In addition to this, the marketing budget can be designed based on the segments or products that generate higher revenue. Analyses such as the BCG matrix can be carried out based on this data where the data can help identify which products are in high growth high market share category, and which ones are in a low growth, low market share, low growth high market share, and high growth low market share categories. Once products are identified based on these criteria, it becomes easier to understand which products will yield the most profit based on their potential and current performance.

Supply chain & Inventory Management

Inventory is an important asset that needs to be strategically managed. This is because low inventories can create problems in being able to cater to client demand adequately, and at the same time, excess inventory could tie up essential financial resources that could be more feasibly used elsewhere. Relevant data, therefore, enables proper inventory control and can also make Just in time Delivery a possibility.

As your local accountant in Dee why and greater Sydney, we can help you identify your slow performing product lines based on accurate monthly reporting. In addition to this, stock takes can be made more efficient where the stock stored by the company can be itemized, controlled, and managed more effectively. The stock takes can also eliminate wastage so that obsolete inventory can be disposed of correctly, or can be sold as scrap.

Non-financial Data

Not all data need to be strictly financial. Non-financial data is very important for businesses, where employee satisfaction surveys and customer feedback can be essential in understanding and evaluating a firm’s performance.

Workplace

Workplace data such as the satisfaction levels of employees can help determine if HR policies and managers are doing their jobs and keeping employees satisfied and motivated to perform their work to the best of their abilities. It is important to collect this data periodically so that satisfaction levels remain acceptable. Sales commission reports are also an important feature of non-financial data as is performance data based on 360 feedback. Such data can be used to develop internal policies that enable efficiently KPI management and align these policies with overall business objectives.

Customer Relationship

Customers are built based on relationships, and relationships are built on knowing customers. Information about customers, their shopping habits, their preferences, and their demands can be gleaned from spending data. This data can be used to strengthen relationships further and can be used to develop a proper Customer Relationship Management system where customer data can be stored in one place and can be mined for rich insights. The data can also be used for meaningful communication with clients such as sending customized promotional messages and celebratory messages such as birthday wishes to develop and sustain long-term relationships. Customer-centric communications can also be stored and used for relationship building, including management of complaints, which when carried out effectively can forge stronger loyalty from customers.

Accurate records of data can be beneficial in several ways. Financial and non-financial data can provide rich insights for revenue generation, sales and marketing, supply chain and inventory management, and management of workforce and customers. These insights can help develop profound strategies that can enable survival and growth. But for this to happen, it is important that accurate data records are maintained and that time and energy are invested in developing data recording systems. Small businesses have scarce resources, therefore investment decisions need to be made wisely, but the best decision that businesses can make is in establishing data recording systems that can be used to inform all levels of decision-making.

Disclaimer: This is generic Information & post; content about the services can be changed from time to time as per your requirements and contract. To get the latest and updated information, contact us today or visit our website.