Grow your business using better financial intelligence | Corelytics financial dashboard

An uncertain economy and increasing competition for new business is driving the need for companies to move quickly in order to capitalize on opportunities. As a business owner today it is imperative that you be able to get the right information, at the right time to make adjustments to stay on course to hit your goals. Business Intelligence (BI) previously unavailable to small companies, are being used by VARs, MSPs and IT Service Companies today. But why use BI and what information should you care about?

Business Intelligence is not a new concept. In 1959 IBM researcher Hans Peter Lund defined BI as… “the ability to apprehend the interrelationships of presented facts in such a way as to guide action towards a desired goal.” Now, more than any time, your business depends on you (the owner) to quickly make decisions and cut through the fluff. BI gives you the information you need in a manner that brings clarity to your management process.

What are the benefits of BI?

• Visibility – get a clear picture of financial movement and relationships
• Decision Making – make decisions about high business priorities faster
• Management – view relevant information without wading through the weeds
• Goal Tracking – understand realistic targets and track progress
• Trend Monitoring – stay tuned to relevant trends in your business and industry

There are three categories of BI becoming more available today you should be aware of as your business evolves a) financial b) operational and c) competitive/industry. This post addresses the basics of financial BI, but watch for future posts that discuss other areas of BI. A lot of people we run into think that since they get reports from their accounting system there is no need for BI, but traditional reporting gives ‘snapshots’ of information and makes it more difficult to see key relationships and trends you can only get with BI. First, set goals for your business then monitor it.

What financial BI should I care about?

• Revenue growth compared to expense growth – expenses should not outpace revenues
• Expenses as a % of revenue – the relationship between the two should be consistent
• Gross margins (growth and % of revenues) – margins are a gauge for profitability
• Profit by line of business (growth and % of revenues) – everything you do needs to be profitable
• Revenue per billable FTE and Employee – make sure you know how to cover the next hire

The Corelytics^TM financial dashboard CoreConnex offers is a great example of an affordable financial BI tool. There are also programs like VitalSigns offered by SMBTN to guide you through integrating BI processes into your business.

The key is to become knowledgeable about this subject because it is a trend that is not going away. Competition is increasing and the winners will be those companies who understand how to quickly see the trends in their business, make the necessary decisions and take quicker actions toward achieving their goals.