Strategies to Drive Business Growth
Rose Report: Issue 52
By Ted Rose, CEO Rose Financial Solutions
Revenue is widely used by enterprises to measure their success. However, even growing businesses encounter challenges getting from where they are to where they want to be. Fortunately, there are navigational tools available to assist you in your quest for greater financial success. Tying your revenue to Key Performance Indicators (KPIs) and metrics is a great strategy to help you drive business growth and increase enterprise value.
A clear knowledge of your business and financial goals is the first step in creating a road map to success. To begin, define your metrics for success. Ask yourself pointed questions: What do I want my income statement and balance sheet to look like? How many clients do I want to have? When do I want to sell my company and for how much? Once you’ve determined your business, financial, and personal objectives, you’ll need to connect them all together to create KPIs that will help you monitor your progress towards your goals.
Having financial clarity helps you achieve your goals. That’s why the next strategy is to ensure you have the navigational tools to drive growth. It is essential to evaluate your finance and accounting systems to make sure they are providing you with the insight you need to make informed decisions. A thorough assessment should include outlining the criteria that must be met in order to meet company objectives. For instance, lowering labor costs, saving time, enhancing accuracy, improving cash management, or reducing compliance risks. Once the deficiencies in your accounting system have been identified, you can set a path to improving and streamlining your operations.
Accounting is about proactively translating financial data into relevant and reliable financial information, not merely compliance and record keeping. Financial statements, project reports, department reports, KPIs, ratios, and other financial information and reports should be generated in a timely, accurate, and easily accessible manner. These financial reports must be generated on an accrual basis, which means matching revenue and costs to the appropriate accounting period. This is the only way to really comprehend your company’s profitability, cash flow, and enterprise value.
Finally, make sure you are a student of your numbers. By doing so, you’ll be able to track your KPIs versus your targets fast and simply. Inflation, market fluctuations, and supply chain issues can all have a significant impact on business outcomes. Reviewing financial reports, including KPIs, on a weekly and monthly basis allows you to quickly identify when you’ve drifted off course so you can make minor adjustments to get back on track.
Schedule an introductory virtual meeting to find out how RFS can help you on the path to long-term success.
This content is for information purposes only and should not be considered legal, accounting or tax advice, or a substitute for obtaining such advice specific to your business.
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