Updated: Jul 27
'In God we trust; all others bring data', W Edwards Deming
W Edwards Deming was the American credited with helping Japan turn around after the defeat and destruction there in World War 2.
Deming worked ON ways to improve the Japanese economy. Japanese people took the advice to work with the data and significantly improved their situation.
We all know that Japan became an economic powerhouse in the years and decades that followed.
In conversations with practitioners in Australia, it appears that the business side of many Accounting Practices is run on inadequate and out of date data.
The reasons cited for this include 'our practice management system produces pages and pages of reports, but they don't contain the combination of productivity and financial data'.
'The extract of the right data from the practice management and the financial system into spreadsheets that they massage into reports takes too many hours of professional time, and we can only afford to do it quarterly or annually'.
These are Practices that preach to Clients to keep on top of their business figures! It doesn't sound like practising what they preach.
How do you rate your Practice's management performance data, and how are you able to use it to advantage?
In my experience, the solution to overcome the delay and cost of production problems mentioned above lies in modern automation tools that can analyse, collate, rank, and present data 'at the press of a button'!
Embedded as part of your Practice Performance Analysis and Reporting, and working with accurate and up to date data, such tools offer business insights to work ON your business that can improve or transform it.
Charts can show trends in your business and Drill Down into detail can explain the reason for a right or wrong trend. Now you can fix it.
80/20 Ranking (Pareto) identifies the top contributors to a business result, e.g. gross profit margin, and identify candidates for upgrading, as well as laggards for divesting.
Much of what goes on in business relies on assumptions. However, the facts are often different. You must have access to the right data!
The trend tracking and analysis provided by these tools have never before been available on-demand 'at the press of a button', and certainly not within economic reach of small to medium business.
Now they certainly are, and partners, directors and managers that ignore them will have difficulty being competitive to take business advantage of future opportunities.
Change is the 'elephant in the room' in many professions. But avoidance of change but putting one's head in the sand is unsustainable. You'll find out too late that a growing number of your competitors have already grasped this as their opportunity.
None of what we are talking about here is rocket science. It's about proven new business tools and methods that are necessary to work ON the business and still be in business in not too many years into the future.
In my next post, we'll look at some examples of using these tools, and how they have the potential to transform your Practice and its prospects for the future.