What's Good To Know Every Day?
In today’s issue…
Essential Flash Information
516 words under 2 1/2 minute reads.
Rarely are outcomes made at a single moment in time. They are typically made inch by inch, day-to-day or using a sports analogy: play by play. Of course, a spurt of activity can highly influence outcomes, but the fact remains knowing the situation in the moment can influence the outcomes earlier.
Accounting by its nature (our resident scoreboard) are usually slow in telling the story. Many companies close well into the next month and have a plenty soft view of the business 3 to 4 weeks later. Some are months behind.
We believe, there are a few information items you should attempt to track (daily). New opportunity activity is one for sure. Having a handle on the funnel of deals helps salespeople move opportunities to close. One simple measure would be reporting new proposal activity (how many and how much are the new proposals going out the door worth and if old ones have changed how much in either direction?).
Of course, new contracts with appropriate client deposit are noteworthy of tracking. New contracts mean future revenue so knowing the size and timing of the contracts is important to forecasting our future. Of course a CRM might handle this nicely as well.
How many times have you asked, what does this month look like revenue wise? And, the answer is a confounding; let’s wait and see. Weekly production meetings can and should help you realize what equipment and associated labor [shipments] is possible to happen inside the month.
Cash collected is always important to know. Having a regular stream of deposits and pre-payments coupled with collected AR creates a discipline of in control instead of always reacting to the collection panic of the week.
Is the information difficult to get? No usually, but much of it is pre-accounting software relying proposal software, production planning boards and manual reporting of collections. If you were a store owner, it would become your end of day report. It could look like this:
A daily input spreadsheet could feed this summary. Typically, 2 or 3 people in the organization will be inputting this information, so a shared collaborative worksheet might work better. The idea is to have a 7AM report every morning.
So why can this be really helpful? We all know we tend to affect those things we focus on. In a business where proposals and contracts can precede revenue by 4 to 6 months plus, upstream data provides better clarity. The data represents three separate behaviors from a salesperson’s point of view; proposing, closing, & production. Once a deal is taken the salesperson has less control over the delivery and production of the project. They do have control over the proposal and closing process. When all three must work together you achieve sustainability.
We believe, this is one area (daily reporting) where getting granularity is a strong benefit to early management. We encourage you to move upstream to collect data to help make earlier adjustments.