Beyond Reports: Power of Conversations in Business
📍 Business advisory is the conversations and the analytics that come from your financial reporting. I want to talk about business advisory and what it is for your business.
📍 Business advisory is when you take your good quality data, your reports, You may produce different reports which aren’t stock standard in your Xero file and you have real conversations as a business owner. These conversations can be with your management team, business owner and your accountant. This is what advisory is. It’s taking the data, what if scenarios and breaking that data down into conversations. There’s no point sending numerous amounts of reports to a business owner and management team.
📍 It just clogs up their emails and they don’t understand it. Unless you have an in house CFO who’s going to understand that, but at the end of the day, they’re doing the same thing. They’re looking at those reports and they’re putting it into common language that you as a business owner can understand.
📍 As a business owner, it’s your role to make decisions, it’s not the accountant’s role to make decisions it’s the accountant’s role to provide you with the information to make accurate decisions. It’s the accountant’s role to make sure that the data in your Xero file is accurate and reliable to have these conversations. It’s important to have an advisor, such as an accountant, in your pocket, as a business owner, to be able to call upon when you need them to make these decisions. Have these conversations with your accountant about various aspects of your business. It might be about your break even point, your margins, your overheads. What sales lines are trending and what aren’t? Understanding trends and comparisons, budgets, historical transactions, even wage costs. are you actually reporting the data in your business? Or is there line items that are missing? Do you have a service department that isn’t even reporting because it’s internal costs only?
📍 These sort of costs aren’t shown on your profit and loss naturally, and therefore they require greater reporting to be able to make these decisions and have understanding of that department. I’m going to quickly circle back to a previous video of mine where I spoke about data integrity and why this is important. Without strong data integrity, you can’t have these accurate conversations. Data integrity ensures that you have the quality of data, the accurate reports to have good quality conversations as a business owner. As an advisor, there isn’t a fixed set of reports we can deliver to you. It’s specific upon what you need as a business owner. And that’s why conversations can often be greater than reports. Don’t get me wrong, reports are still relevant. But my opinion is that conversations have greater value than reports do.
📍 Because conversations are about the reports, conversations can open dialogue and have greater meaning and understanding to business owners. Conversations allow you as a business owner to go down a path which a report might not show. You can have these conversations whether it be 10 minutes, half an hour, 1 hour long with your accountant and really dive into this topic that you’re talking about. Whether it’s a particular sales item, whether it’s a process that you’re doing internally, whether it’s wage costs, whatever the topic is, you can have these conversations. Reports provide you that insight to start that conversation, but the best value is within those conversations. Not in a stack of reports that don’t mean anything to anyone.