Running a business is a daunting task. There are a lot of balls that you have to juggle to keep everything going without a hitch. One area that requires a lot of analysis and brainpower is the financials. This is where you learn and plan about how money goes in and out of the company. It is a job best suited for professionals such as accountants and bookkeepers. Not all entrepreneurs have a financial background, and they can just hire a knowledgeable person to fill that function.
Some companies do not find the need to have someone work for them full time. There are temporary CFO firms out there if you want to go this route. They will help crunch the numbers when needed. They are perfect for those smaller companies that do not have their own finance officer.
Going over your financial figures gives you insight into how your business is performing. It is important that what you see is as accurate as can be. With numbers as complex as a maze, things are bound to result in errors at some point. Here are tips for you to make sure that your data is always correct and reliable.
Avoid Multiple Sources of Data
It is funny to think about how rumors come to life. They exist because of people’s different interpretations of information relayed to them. That is similar to what will happen if you encounter discrepancies on your financial figures when you cite more than one source. This mostly happens when a company employs the use of multiple programs or systems to crunch their numbers.
Having departments that do not have a standardized approach to extracting data can also be a problem. Given all those, there is no guarantee that their figures will match. Cut the inaccuracies from the root level by having a standardized tool dedicated to your finances. Using this across the board will ensure that whomever you get the data from, you will have a consistent result.
Build Robust Formulas and Macros
Another great tip for keeping the numbers accurate is by making everything digital. It is no secret that computers are more efficient at pumping out numbers, and having the human element in there will just introduce a chance of error. These days, it is common to see companies using spreadsheet software for much of their records. These programs also allow you to write formulas and macros that you can apply to the whole sheet. This means that if you are asked to solve for hundreds of lines of data, you only need to figure one of those out first and then replicate that to the whole file. This avoids the tedium of computing line by line, which would be prone to errors.
Start Complex, Streamline Later
Understanding financial numbers does not happen overnight. You have to invest time in it for you to know what is happening. If this is translated into a cash model that you have created in a spreadsheet, it is fine if you have as much information from there as possible. Over time, you will understand that there are data that are more useful or important than the others. Slowly, you take the fluff away until you reach a point where you have greater clarity over things because you have it all streamlined.
It takes a special kind of brain to digest all of the numbers that financial records show you. But it is an important part of the business. Numbers do not lie, and they can be a good gauge of what is going on in the company. If you need to take action, it is better to do so on the merits of being objective. And that can be done using accurate data as a reference.