Financial directors within small and medium-sized businesses often say that profit and loss reports prepared for the monthly Board meeting get little or no reaction. In some instances, this could be because the data is not being interpreted fully or accurately enough, or else it lacks the layer of interpretation needed to make it meaningful.
Enjoy this series of shorts on Metrics from Jim.
KPIs may be the most quoted lousy leadership tool in the book. They are lousy because they’re used the wrong way. The concept is powerful, both for redirecting company effort and to test new initiatives, among many benefits.
Stand this checklist alongside your KPIs and see how you score. Answer yes or no.
An important question financial executives are often asked by the Board, their CEO and executive peers is where did our cash go? The folks making these inquiries know sales are being made while money is being spent on salaries, inventory and equipment, but they don’t really know how, when or where it flows.
You’ve owned your business for years, possibly even decades. You’ve built it into an enterprise you’re proud of, and you believe it has a bright future. However, you’ve never had a need for reviewed or audited financial statements.
Why would you? After all, you file your taxes and turn an impressive profit. However, now that you’re considering a sale, you realize your finances need a little work before they’re ready for the scrutiny of third-party buyers.
Turning an economic downturn into a financial upturn for your business.
Whether it’s a slow down in consumption due to inflation, asset bubbles about to burst in the housing and stock markets, a supply chain run amok, pandemic government relief running out or just a “long in the tooth” expansion; there are loads of discussions taking place on how our robust economy could be nearing a downturn.
How can you determine what this might mean for your business? Here are some thoughts I developed with a colleague recently. We applied the concepts to our businesses to help us prepare for a changing economy.
