Track your progress – what to track?
Don’t fall into the trap of preparing budgets and forecasts and then forgetting about them. Here we outline how to track events that will help you grow, and we de-mystify the Balance sheet as it can unlock secrets too.
What are variances?
Many businesses forget that the way you will drive your growth is through understanding the impact of:
- I said we were going to make X and we made Y (It is a good thing if the actuals are more than the forecast for Revenue accounts and KPIs)
- I said we were going to spend A and we spent B (It is a bad thing if the actuals are more than the forecast for Revenue accounts and KPIs)
These examples are primarily focussed on Profit & Loss variance analysis
Tracking revenue and expense variances against your plan gives you control. When you start digging into each account, or each operational KPI, the variances start to tell you a story that looking at the pure numbers may not have highlighted. Tracking the numbers on a chart, will give you a fantastic first indication of trends occurring, but having a simple red or green arrow flagging where your business is strong, or needs some attention, helps massively.
The variance itself is as important a KPI as the trend-line.
Sometimes a single variance result can be broken down into many smaller positive and negative variances. If forecasting has been created for departments or projects for instance, the results will be more granular and will highlight the marginal gains you need to make within your organisation, which when combined, will create a positive effect on the business.
If variances are monitored frequently, timely alterations can be made as they are needed, circumventing the need for more drastic adjustments later.
Balance sheet analysis is equally important
A Balance sheet is a snapshot of your business at a point in time, on a specific date. Simply put, it shows what assets your company controls and who owns what. You can run a Balance Sheet report for weekly or even daily analysis in FUTRLI. Restricting your reports to month-end, will sometimes hide the variances, patterns and trends contained within these snapshots. When you combine this with the ability to do the same for forecast/budget data, there are powerful insights to be had, that don’t need to feel like they are scary to find.
Read on for a Balance Sheet 101!…
“"My client's love seeing the different charts and exploring how we can better monitor and track their data. I have never gone to a client meeting with the intention of selling FUTRLI. Instead, I know I have it there to show them once they steer the conversation towards a problem that FUTRLI can help them solve. Being able to instantly provide my clients with a solution to their problem has resulted in a 100% sign up rate so far. It really is the easiest upgrade/additional service to sell. I love it."” - Claire Owen-Jones