Combining available financial and operational information in one reconciled, consistent picture allows all stakeholders access to the same accurate information. At the same time its eliminating the need for time-consuming data aggregation, reconciliation between individually maintained data sources and debates about different narratives.
Relaying firstly on the accounts (based on actual documents and cashflows), further explained by multiple operational data points, the model presents a quantified, objective picture of the business.
Moreover, all data is aligned in a meaningful, relation-driven way where operations drive financials, or financials can impact operations.
This allows for timely and diligent decision-making, grasping opportunities or mitigating challenges ahead of time.
Relation-driven, quantified, functionally sliced business parts provide needed granularity to clearly visualise each trend or impact of assumed improvements.
For example, a highly complex target like net profit growth can be apportioned into multiple contributing areas, each one assessed and discussed with the responsible team and assigned as the next period's achievable target.
It's either incoming actuals, forecast, budget variations, financing challenges, you name it, you will see it coming before time and therefore be able to prepare and implement solutions, staying ahead of the curve.
Following business structure and objectives, the model is designed to naturally assess performance in all areas. Whether it's growing sales by categories, maintaining cost efficiency, or delivering improvements, all are clearly visible at a glance.
Examples:
Sales per business line
Revenue per account
Unit cost per delivery
Margins per business line
Lead generation vs incurred expenses
Project progress vs timeline or budget
This transparency increases accountability for results and helps drive engagement and the focus on objectives.
It also helps to structure bonus compensation around individual targets and maintain alignment between individual and corporate objectives, which drives engagement even further.
A significant portion of the model design focuses on mapping out business flows, matching relevant data points and developing relations between them. When completed, all the analytical insights become clearly visible and are updated automatically in the next actuals reporting cycle.
Whether it is performance in revenue categories, operating margins, KPIs, cash utilisation, or anything else, all can be instantly assessed without any additional effort.
Moreover, any variations are automatically explained and compared with multiple reference points, such as the previous month, previous quarter, budget, forecast and more.
A significant portion of model design focuses on defining business logic, matching relevant data points and developing relations between them. When completed, all the analytical insights become clearly visible and are updated automatically in the next actuals reporting cycle.
Whether it is performance in revenue categories, operating margins, KPIs, cash utilisation, or anything else, all can be instantly assessed without any additional effort.
Moreover, any variations are automatically explained and compared with multiple reference points, such as the previous month, previous quarter, budget, forecast and more.
Due to
an aligned historical information for multiple months back and
meaningful grouping of the accounts in functions,
Through structuring the closing hierarchy, coordinating stakeholders and identifying gaps that need following up, the model becomes a guide and a tool in improving the monthly closing workflow.
Businesses constantly evolve, thus a model must be flexible as well. Adding new business lines, new sales categories, evaluating new projects, providing better cost granularity, adding financing and so on, can be smoothly incorporated within the already existing design, without engaging multiple stakeholders or starting from scratch.
Another flexibility benefit arises from incorporated consistency checks, which allow for the identification and inclusion of missing new information or data, without time-consuming communication and team coordination efforts. That helps every team to focus on its work, but guarantees that no change gets omitted during the next reporting cycle.
Working either with investors, auditors, authorities, partners, whatever depth of information or insights is required, you already have it prepared, accurate and professional. That builds trust and reliability in your business.
Whether it's your team members, you, or us, multiple things will get noticed otherwise invisible and help you take appropriate action to drive business growth further.
Usual alternatives consist of
Employing a mid-level professional who will be learning on the job
Creating whole department(s) handing similar level of sophistication
Deploying a software that will take months to be implemented only to prove it doesn't reflect your business well.
By including all financial information, explained by operational data points and promptly updated each month (including adjustments to forecast and variations explanation versus the long-term plan), the model presents a full controlling picture of the business. Every unusual number can be quickly identified and explained.
As an owner or investor, you will always know what is going on.
That translates into grasping opportunities, eliminating inefficiencies and staying prepared for challenges.
Multiple data sources presented in a consistent flow, as one complex picture, supported by various analyses and KPIs, help transform into structured and focused on business discussions, eliminating the need for time-consuming and confusing individual presentations, analysis or reciliations of them on the fly.