When a company is going from strength to strength, it can sometimes be difficult not to get caught up in the successful wave of action, of accepting orders, celebrating increased demand, fulfilling orders and reaping more success. But investing the time to analyse each business function and creating business reports allows a business to measure and track their success, and plan for the future.
There are many benefits to creating business reports but one of the main positive outcomes of it is that it provides companies with the opportunity to formally and critically reflect on the past time period and how the company has truly fared. In particular, it allows for interdepartmental comparison and analysis so that the departments who are not performing so well can be assisted and given KPIs to aim for, thereby increasing overall success.
Often businesses, particularly small ones without large management teams and governance boards, operate in the here and now, responding in an ad hoc manner to setbacks and celebrating profit as the only indicator of success; and so their full potential can be stunted as not every measure of success or failure is considered.
In addition, business reports provide an account or snapshot of how the company performed in each area of importance. These can then be used as evidence for financial providers, shareholders and board members to guide decision making and provide assurance that the company is successful and can be a solid investment opportunity.
So now that we have considered the value of business reports, what are some types of measures to include in business reports and how might reflection on these measures benefit the company?
Knowing where your business places in the current industry arena can inform how marketing funds are allocated to ensure you remain at a competitive advantage. A complete market analysis and report is important to inform those who may not have intimate knowledge of the industry, but are involved in key business decisions and strategic planning.
This is more than just reporting on the profit a company generates in any given quarter. This is a detailed report on how profits trend and where the problem or success areas lie. For example, if profits are declining over the previous quarter, and when analyses are conducted, it emerges that raw commodity prices are increasing, then this is a convincing reason to increase sale prices to ensure profitability in the future. Financial reports are generally done monthly and allow for swift action if errors are detected, rather than letting them accumulate to the end of the financial year when they are far harder to correct.
A large part of a company’s overheads is its staff and equipment. A significant way of reducing these and thereby increasing profitability is to ensure operations are run more efficiently, be it staff time or running machines and production lines at capacity. The only way of obtaining an accurate picture of operational efficiency is by conducting this analysis to detect downtime, inefficiency or areas of frequent error.
Customer satisfaction analysis
Of course, a company is only as successful as the need for their service or product. And this is directly attributable to the experience a customer has when dealing with the company. Therefore, a useful measure of success to report on is the satisfaction of customers and any suggestions for improvement. Often, price is not the only aspect a customer values when interacting with a company; they often expect ease of use, service, trustworthiness and on-going support. Brainstorming ways to increase customer satisfaction following a detailed report is an important and often overlooked way to increase profitability.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.