2 min read
In my day-to-day business with different businesses, I have noticed how small business owners overlook different opportunities on the grounds that they are “busy”. This reasoning is always present even when reviewing, analyzing and understanding the company’s financial data when required.
With the development of technology and its proliferation in the field of accounting, it is becoming easier and easier to track financial information. Tools like QuickBooks help business owners to minimize risks and make proper strategies by providing real-time access to easily understood financial data.
Is there a difference between expectations and reality?
Numbers are the language of business. Just high sales forecasts and positive trends do not paint the true picture of what happens behind the scenes. The fact that you have a turnover but at the same time an increase in accounts receivable presents a risk to the business, or wrong production costing versus good turnover results in unrealistic profitability. Many times business owners treat advances received as their own money and continue with uncontrolled expenses, forgetting that advances are liabilities rather than assets.
Why is quality information important to business?
Accounting is a part of a company’s financial management. In fact, large companies for this purpose have financial planning and analysis departments. The professional teams at these companies work together to identify which financial data is relevant at the moment, identify profitable business pillars, identify inconsistencies, and support management to plan for minimizing challenges. These analyzes can provide early warning of the risks before they occur, helping executive management determine what are the weaknesses in building a plan for the future. While small and medium-sized businesses do not have the budget for a finance department that deals with analytics and planning, this leaves business owners without a robust source during various analyzes.
Identifying the best information
The first step is to identify the appropriate accounting software that enables the generation of qualitative and real-time financial statements.
QuickBooks enables this easily and effectively, where at any time from the generated financial statements you can trace the origins of assigned numbers to the source document with the click of a button. QuickBooks also enables digital archiving of physical document which is attached to the transaction registered in QuickBooks, so all data is available. Real information about liabilities, including accepted advances, is very important to the owner and the lack of this information can have major consequences for the business.
In the end, qualitative data is important in every field, but timely financial information is critical to running a successful business. When businesses are overloaded with unstructured, inaccurate, inaccurate data, then the risks are very close.
It’s a general rule, the most successful businesses are those that have the right information at the right time.