The Key to a Successful Business
Posted On November 22, 2008
- Relevant;
- Accurate;
- Timely; and
- Informative.
Easy to say, not as easy to do. First off, the business needs to identify what results are relevant.
In one business that we are involved in this means sales leads, demonstrations done, quotes issued, orders booked, then sales completed. The first 4 of these come well before money ends up in the records, but are obviously very key in generating that.
In another, it is phone calls received, qualifying appointments booked, surgeries done, then reveune from medical procedures performed. Again, 3 are before money changes hands.
These key metrics need to be measured religiously, constantly, and summarized in a timely informative way so the business managers can assess the success of their efforts. A business' information system must be capable of capturing these, and its Finance department must be attuned to reporting and interpreting these so a business can identify well ahead of it happening what the prospects for cash flow are.
If your Finance department isn't actively doing this, then it's not doing its job for you.
