Analyzing every aspect of a business is the key to success. Working very hard selling products while cutting costs on a daily basis isn’t enough. Every business owner has to keep track of their company’s transactions in order to maintain a healthy financial position. The first step in getting to know a business better is to start monitoring important reports based on the crucial factors that make up a business.
Having insight as to where your business stands in terms of sales and expenses will motivate you to perform better. Being on top of current sales figures on a daily basis can help you maintain consistency towards your target. You could then begin to further market your product online or on social media in the hopes of more sales. These online aspects of the business can be tracked and have also become very important in modern online business.
With sales and marketing comes the daily operational expenses and inventory control. These aspects of the business also need to be kept under control. This can be done by daily or weekly reporting. It is important to note that every report is only as good as the accuracy of the data received. You will have to ensure strict protocol when daily transactional data is being captured into a business’s accounting software.
Sales are what keeps the doors open. Consistently monitoring your past and present sales will give you a better understanding of how things are going in the business. This is probably the best way to stay on top of your sales at all times. Always knowing the current state of the company’s sales will motivate you and the sales team to push forward towards the monthly target.
You can also include forecasted sales to a sales report. This will assist you in properly measuring the progress a company makes in regards to its sales target. Sales can also be directly compared to expenses. A company's sales less its expenses for a given month will either give you a profit or a loss.
It is, however, important to note that sales figures are only as accurate as a company’s ability to recover the cash from its sales. This is why it is important to ensure that cash is exchanged along with every sale. You can keep tabs on the cash flow of a company by analyzing cash sales and debtor reports. The less money outstanding, the better the cash flow.
Monitoring a company’s expenses is just as important as keeping tabs on sales and cash flow. What good are all those sales if a company does not pay attention to tracking and regulating its costs? This is why every single penny spent should be recorded. These figures can be further categorized into their respective expense accounts.
Every company should consider a monthly expense budget. This will help you determine the infrastructure of the company. In other words, the cost of keeping the doors open. The expense budget will consist of various costs like rent, electricity, and staff. Setting a monthly expense goal and maintaining it will allow you to set reasonable sales goals as well.
There will be months when the expenses will drastically exceed the budget. This isn’t always necessarily a bad thing as expenses can increase along with sales. An example would be the more sales you do, the more stationary, packaging, and fuel you will need. Try to monitor each expense individually month to month. This way you can further investigate any spikes in expense and compare it to previous months.
Inventory reports will give you a better understanding of the stock you have on hand. These reports will assist you in determining which items needs to be ordered to replace sold stock. Inventory reports can also give you a good indication of your stock movement.
You will be able to determine which items are moving fast and which items are considered "dead stock". A stock age analysis will give you a clear indication of the total amount of days a particular item is in stock. Items that are between 60 and 90 days old are considered slow movers. Items older than 120 days can be considered dead-stock. This is when a company should begin to make arrangements to either write-off the stock, or aggressively market the item at cost price.
This is essential in understanding the behaviour and geographical location of online customers. These type of reports also have information on the amount of time a user stays on the website. If a short amount of time is spent on a website, then the content or product isn’t engaging enough. This information can further assist a company in creating tailor-made marketing campaigns.
Most website platforms have basic website statistics available. You can opt for third-party plugins or software for more in-depth analysis. Google Analytics is one of the leaders in reporting website traffic. The interface is user-friendly and integrates with other Google services as well. Understanding software like this can assist a company in optimizing their website for the best user experience possible.
Optimizing a website to further increase engagement and sales conversion is called conversion rate optimization (CRO). A website’s conversion rate is the percentage of visitors who actually opt-in for that website's service. If your websites conversion rate is 5%, then 5 out of a 100 people that visit your website will most likely purchase or participate in something related to your website.
Many online businesses today rely heavily on their communities support. Most of these communities exist online on social networks. This makes social networks an excellent place to market and distribute information on their products and services. The most popular social media platforms like Facebook and Twitter have free social media analytics (SMA) available.
Social media analytics offer data in a most impressive way. The data comes in the form of most popular content and content that is not that well received. You can view reports that are time sensitive. This gives you an idea of when your audience is online. Knowing this will assist you in posting at the correct time, increasing the impact of the post. More reports come in the form of total impressions and engagement.
As mentioned earlier, accurate data capturing is imperative towards successfully analyzing a business. Not passing credit notes can cause a sales report to have inflated sales figures. This poses a terrible implication that impacts negatively on other reports as well. The company’s profit, inventory, and other sales related reports will all be affected. It’s best practice to place as much scrutiny as possible towards this aspect of the business.