Page 11 - KFMS Your Own FD Ebook

Reporting

It is critical that you are creating and extracting the right data from your business system

Many businesses have insufficient processes and systems in place to record their true activity.
When a business knows the reality of how it is performing, they at least have a platform to work
from and can make decisions based on facts rather than speculation and anecdotal evidence.

Not knowing the facts puts owners and management in a weak position. It is hard to make
confident, strong decisions using poor data and reports. Without the right information, collected
in the right way, effective analysis and clear planning is impossible. The importance of business
reporting is:

1. To have visibility into the future (i.e. knowing what is likely to happen)

2. To be able to view past performance (i.e. for comparison with current performance)

Well-designed and relevant business reports are the secret weapon for businesses with ambitious
growth plans.

Questions that will be asked by an FD are:

• Do you know which of your products and customers is the most profitable?

• Do you know where your break-even point is?

• Do you know how effective your team is at controlling costs?

• Have you set annual and monthly budgets?

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