Not more spreadsheets to analyse and chart…

Always a regular cry in the office. Reports produced on a regular basis need to be embellished, with charts that involve some fairly complicated calculations – cross-reference look-ups, previous month comparisons, and all that sort of thing.

Probably, now this is done largely by hand. The data sits in several spreadsheets and/or databases, and is extracted, filtered, pivoted and everything else that was necessary to get it ready, before feeding into a chart. When the chart was ready, it is pasted into the report.

Wouldn’t it be great with the data is all in one place, and with a single front-end, the necessary criteria set from drop-downs. Once these selections have been made (locations, benchmarks, which dataset to use, and so on) you click a button and go and make coffee. Actually, you haven’t really got time to make coffee as the process takes just a couple of minutes – if that.

In this instance, any number of queries can be run; sometimes one query, sometimes several to generate the data. Each one automatically loading a into an Excel workbook, in to the right columns, in the right order to aid presentation. Then, your screen explodes into a fresh multi-coloured set of charts based on the information just collated! And is that the pivot table I slave over every month appearing before my very eyes!

In the past that has meant spending anything between a couple of hours to a couple of days for more complex reporting every period. Multiply that by twelve, and it becomes a not insignificant amount of time in a year m to get these twelve reports, graphs and charts prepared.

Say it was half a day of someone’s time, at the average salary of £26,000 – that’s a cost of around £60+ to the business for each report, or chart. Each and every time.

If reporting is weekly, that’s going to be more than £3,000 every year – more likely a lot more than that. If it now takes 30 minutes to do the whole job, that’s a total of just over 4 days for the whole year’s worth (at one report a week). The four days will cost under £500. So you get to keep £2,500 to do something else with.

What would you like to do with it?

Excel automation by Bob Lewis-Basson – 07802 441 728

This short paper is intended to help you with being much more effective and profitable in the way you run your business, by keeping better track of your finances and using the financial information you have to better effect.

I am not an accountant and most business owners are also not accountants but we DO need to make use of what the financial figures are telling us. This needs to be done on a regular and ongoing basis. For most of us, most of the time, the practise of accountancy can be gobbledegook. In some ways this is probably as it should be, after all accountants need to go through many years’ of study to get properly qualified, and it can be very complex. We should trust our accountants to “get it right” for us and for the most part, they will. However most will not be managing your finances on a regular week by week and month by month basis.

We must trust ourselves rather than others, to know and understand how to run our businesses. Because we are so close to it, it is only really us that knows what is happening and understands properly the impacts on our business. I will argue two fundamental points:

We cannot run our businesses as well as we should, without an up to date knowledge of what is happening with costs and income, and
It is not hard or complicated, it is common sense.

We will tackle a number of subjects in this paper. When considering them, we will see that none of it is rocket science, but all of it is essential.

Taking Management Action

My main argument is that we need to take action in our business depending on what is going on around us. This includes what has already happened, but much more importantly what we think is going to happen, some examples:

Are these customers going to continue to place orders with us?
Are our utility costs going to go up?
Have we a Sales Drive coming up that will deliver us lots of new orders?
Are there some changes in legislation that are going to affect us?
Do we have some machinery that is nearing the end of its life and needs replacing?

The list is endless, but is actually the list of things we constantly think about when running our business. They all have some form of financial impact, and we can plan for it, and forecast the impacts.

Forecasting

It is important that we have a forecast of what is going to happen. Most of the time when I talk to business owners, they say that they cannot predict what is going to happen. I’ve lost count of how many times I have heard; “we cannot predict our future business”. I contend that this is actually not true and it is the forecast that will tell us what actions we should be taking. At least then we have a chance of:

Mitigating any potential problems we can see coming, and

Taking best advantage of opportunities there are

Cash Flow

Cash is King, and there are many, many good works that go through this in depth. In fact it is not hard to do a cash flow forecast, but it is vital. Forecasting cash flow need not be an onerous task. There is not necessarily a need to do it weekly, but it is very important to be able to see when the bank balance is likely to dip. You should always have good relationships with your customers, and it is very important to be firm about when they pay, after all the money is owed to you – you are entitled to it.

Monitoring

In most cases, our accountants will do our annual accounts some time after the end of the year. A good accountant will provide some analysis of the differences between these accounts and the previous years’ accounts. I argue that this is all very interesting but completely useless in the day to day running of our business. It is all ancient history. We need to monitor what is happening NOW, and what is going to happen. Only then can we actually do something about it. A simple (monthly) monitoring system is critical.

Summary

Simple, practical and straight-forward basic financial forecasting is the real key to a successful business. Monitoring the finances and making changes does two things:

It means you don’t leave tackling issues until it is too late
It enables you to be positive and pro-active with making the most of business opportunities

If you would like to find out more about how we can help you to be in control of your business and manage it more effectively, contact us at:

info@swba.co.uk

Tel: 01225 580103

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