We began working with a new customer last year and in our first meeting, this company shared the monthly report package that was provided by their current CPA firm. This CPA firm used an application called Fathom that produces reports full of key metrics based on your QBO data. The application is fantastic; we use it all the time. Here were the problems:
• The financial statements were junk, so the metrics were also junk;
• There were over 30 metrics (yes, I said 30); and,
• The company ignored all of them.
In this day and age, there is no shortage to the data available to us. You can research anything and get thousands of search results on any topic you choose. You can find multiple websites that comment on the issue you’re researching and they’re all likely to be somewhat different. As I have often said, ask 5 consultants the same question and you will get 7 different answers. The problem is that we have too much data and not enough useful and actionable information.
Take this company I met with. If they had received a report with maybe 5 or 6 key metrics, the important ones that make a difference to the company’s performance, the company owner may have reviewed them. He may have worked to understand them and how they impacted his company. The CPA firm would have needed to get an understanding of what was important to the company’s health; they didn’t do that, so they just threw out 30 metrics and left it to the company to pull out what was useful. So, what did the company owner do? He filed it away and went on with his work. He didn’t have time for that, and who could blame him?
As a growing small business, you need:
• Someone to help cull through the massive amount of data that your company produces and prepare an analysis based on what you both agree are the key metrics for your company;
• An understanding of what is important to know on a day-to-day and month-to-month basis; and
• A concise dashboard that allows you to see those metrics easily.
Our Grow-Up Consulting engagements are designed to dig into your company’s most useful metrics so we can show you how to track them and what they mean. But it takes time, work, and a documented understanding of your business. If you’re interested in breaking through the noise of data to look for useful and actionable data, let us know. We’d love to help you do that!