When was the last time you looked at your operations in depth? Are you as efficient as you could be? Are time consuming procedures followed simply because “we’ve always done it that way”?
Are you printing two or three copies of documents, only to stuff them away in a filing cabinet “just in case they’re needed”? When someone has a question on a document, are they able to answer that question from their desktop, or do they have to get up and go somewhere to find a physical document? Is the water cooler on the way to that place?
Are skilled people spending too much time on unskilled or semi-skilled tasks? Are career positions structured in such a way as to provide incentives and promote retention? Are employees grumbling about things behind your back?
We can use our extensive management and systems analysis experience to analyze and evaluate the efficiency of your current operations.
Sales and Inventory Analysis</b>
Are you analyzing sales trends to discover and quantify changes in your product mix, seasonal variance, increase or decrease in average sale amount, average margin, etc.? Can you identify your top 10 customers for any chosen time period?
Do you have your inventory divided into A B and C items, and manage stock accordingly? Do you have a good set of reorder levels and a feedback mechanism or process to make adjustments as soon as they are warranted?
Expense Analysis</b>
Do you have a way to measure the effects of your marketing and advertising efforts? Is your labor reporting accurate enough to allow you to use your workforce efficiently? What’s it costing you to put that salesrep into the field? Are your expenses allocated properly among departments?
Financial Analysis</b>
Have you developed a set of “critical figures” to monitor on a regular basis? Not just your inventory, payables and receivables, but formulas and ratios that express things like cash flow, labor to material ratios, sales performance as a function of selling expense, etc. ?
Are your customers paying you in a timely manner? How many days’ sales do you have in A/R? Are you paying your bills too quickly? Are you taking or losing prompt payment discounts? Do you have a good way to measure return on investment?
Do you have a set of comprehensive, accurate, and easy-to-read reports to support this effort? Is this information, a permanent fixed cost, being gathered and created as efficiently as possible? Are you missing out on critical information because it’s just too hard to gather and assemble? Are you suffering with a substandard presentation of this information because your software isn’t flexible enough to allow customization?
Techniques
Is information that is best understood visually being presented that way – via well-designed charts and graphs, and in color?
Do you make use of exception reporting to save time? The concept behind exception reporting is that you tell the computer system to warn you when certain conditions occur, such as abnormally high or low sales, costs, etc. If everything is running as expected, no report (or a negative report for your reassurance) is generated. Most accounting systems are limited in their ability to generate this kind of information. We are very good at it.
We can help you find the information you need to manage your business’s growth, determine the best manner in which to present it, and set up a reporting schedule that will bring some consistency and discipline to your analysis effort. Best of all, it will free up your time so that you can put the information to good use. And if you want to spend some of that time in deeper analysis, we can train you in the use of various query tools that make ad hoc “what if” requests easy to produce.
You have a considerable investment in your accounting system. It’s a fixed and necessary expense to support your financial operations. Why not leverage that investment by using the information as a strategic tool to guide the growth of your business? We think you’ll find it’s possible to turn an expense into an asset!
Dedicated to developing innovative solutions to your business challenges October 2011
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