When it comes to making smart business decisions, using analytics and metrics to guide you will ultimately lead to the best results. In this blog, we will discuss some ways you can use your financial tools to create smart, data-driven decisions.
Detailed and accurate record keeping is key to developing accurate forecasts and projections that can allow you to properly plan for your business’s future. The balance sheet provides detailed information on day-to-day activities and can be used to check the health of your business. The data in your balance sheet reflects the stability or vulnerability of a particular part of your business and can help you create a sustainable balance between your assets and your liabilities.
Improper cash flow management is one of the top reasons why startups fail, so having steady and predictable cash flows is vital if you want to keep your business afloat. The cash flow statement can help you make smart decisions by allowing you to see how much a decision is going to cost you and what kind of returns you should expect. Want to learn more about how to properly manage your cash flows? Click here.
Profit and Losses
The profits and losses of a business, which are shown on the income statement, can show much more than profitability. Diving into the numbers of your income statement can help you discover where your strengths and weakness lie. Once you know this information, you can strategically focus on the areas of your business that bring you the most money and those that need work.
Once you are familiar with the data and numbers associated with your business, create a list of decisions that must be made and decide which are the most important. From here, you can assess the factors that must go into each decision and align those with the data you have. Ultimately, the information from using financial accounting provides you with a baseline for decision making analysis, and helps you make decisions on how best to allocate your resources.
Learn more about how to leverage your financial data in our free ebook: A Business Guide to: Analytics, KPI’s & Dashboards.