Thanks to Making Tax Digital (MTD) and cloud-based bookkeeping systems, businesses have access to a vast amount of financial data. Yet, the true value lies not in the raw numbers, but in the ability to extract meaningful insights and turn them into actionable wisdom that can drive your business success. Here are six ways to power your financial data to make informed decisions.
How to use financial data to drive business success
1. Manage what you measure using Key Performance Indicators (KPIs)
What’s important to you? What really nudges the needle in your business. By Identifying and tracking the things that matter, like gross profit margin, customer acquisition cost you’ll gain insights into your business’s health and spot trends that can inform your strategic decisions.
2. Look at the trends
Use historical financial data to analyse trends and patterns. Look for seasonal fluctuations, growth trajectories, and any unexpected anomalies. This analysis can help you anticipate periods of high demand, plan for slow seasons, and adapt your strategies accordingly.
3. Make the comparisons
Compare your financial data against industry benchmarks and competitors or against yourself this time last year. This will help you identify areas where you’re excelling and areas that need improvement. Understanding how your business measures up can guide your efforts to remain competitive.
4. Identify cash flow patterns
Your financial data can provide crucial insights into your cash flow, allowing you to predict when your business might experience cash shortages or surpluses. Effective cash flow management ensures that you can cover your expenses, invest in growth opportunities, and weather financial challenges.
5. Find out things that you didn’t know before
Got a hunch about most valuable clients, popular products or services, and buying patterns? Make sure that these hunches are correct by using AI software such as PowerBI. This information can guide your marketing efforts, inform product development, and enhance customer satisfaction and improve your sales, profit and cash position.
6. Forecasting and Budgeting
Use historical financial data to create accurate forecasts and budgets. This forward-looking approach empowers you to plan for future investments, expansion, and other financial decisions with a clear understanding of their potential impact.
Turn financial data into actionable business insight
Turning your financial data from cloud bookkeeping into useful wisdom takes more than just software. It requires a curious, questioning mindset—one that uncovers the story behind the numbers and uses it to shape your business’s direction. Our team of experts can help you do exactly that. Through our budgeting and forecasting service, we’ll help you make sense of your numbers, plan ahead, and stay in control of your financial future. It’s not just about the numbers, it’s about what they reveal. Use that narrative to steer your business with purpose and build towards a stronger, more sustainable future.
If you’re new to Harland, book a free discovery call to see how we can support you. Already a client? Get in touch with your Client Manager or email us directly to talk next steps.
