Turning on Your Financial Brain with Fathom
Growing businesses need to find the right information to rely on when making business decisions. Yes, your business may have a set of financial statements, but what is that information really telling you? Financial statements created by a professional and maintaining consistent accounting policies are the first steps in taking control of your business; however, businesses producing millions in revenue already have these procedures in place.
Turning on your financial brain can take your business to the next level through strategic planning. If you’re financially struggling, finding creative methods to grow is more of a must. Making the right business decisions shouldn't be all gut. Instead, you should rely on data to support your decisions, giving your business the best chance of success. Regardless of where your business is at, you must still plan to see a brighter future, achieve more goals, and set your business up for long-term success.
Finding Viable Solutions
Uncovering the right solutions for your business doesn’t have to be complicated, especially with the abundance of companies focusing solely on solving this issue. One company that is providing business owners with the opportunity to harvest data useful to their decision-making process is Fathom, which looks to focus on different data-intense areas that your business might be overlooking through integration with QuickBooks & Xero.
Analysis
The first solution is to ramp up the analytical features you track each period. Analysis coupled with graphs and charts complementing the data leads to greater comprehension of key information. Fathom offers users a range of visualizations that aim to help them make sense of the numbers without jargon worked in.
In addition, KPIs are easily tracked from one period to the next based on the parameters you set, giving you full control of what’s important to your business. The formula bar worked into Fathom is crucial to optimizing your data reporting based on operational and strategic objectives.
Photo Credit: Fathom
Reporting
Next, you want to take a look at your current reporting processes. How often are you viewing financial reports with corresponding ratios? The more frequent you review these reports, the more transparency you will create. Ideally, you want to be focusing on your reports at least once a month. With Fathom, you are able to select reports based on your business needs. For example, if your business is trying to improve cash flow, you would want to understand the areas of improvement from the cash flow report.
Photo Credit: Fathom
Forecasting
Correctly forecasting scalability and growth takes abundant resources, including accurate accounting data. One of the perks of utilizing Fathom is using the Goal Seek function, which allows you to back into your budget or target by setting your goal. Instead of just hoping you will grow in business, Fathom can help ensure that your goals become tangible by consistently providing forecasting and budgeting tools designed to work alongside you. From modeling new revenue streams to business planning your next venture, don’t forego the resources that can help you get there.
Photo Credit: Fathom
Understanding Big Data
Big data comes with more benefits than just expanded analysis, innovative reporting, and creative forecasting. Each of these items leads to the potential to enter new markets and grow your business into a successful enterprise. When business owners want to achieve a higher profitability, many automatically assume that they need to find new products to sell or raise their prices. These two items may actually cause the business more harm if there isn’t sufficient capacity or resources are being overutilized.
Turning on your financial brain involves weighing the information the data is telling you instead of solely focusing on the bottom-line number. Big data can work great if you have a full comprehension of what each metric means and the methods to achieve more favorable results. This is when working with an outsourced accountant can be beneficial. An outsourced accountant is an independent party with expanded knowledge of accounting information, meaning they have the expertise to interpret the information into usable terms. Having a qualified professional allows your business to take full advantage of big data.
Implementing Change
Successfully deploying your newfound information can be challenging for some business owners as comprehension of what the data is telling is not as clear-cut. Utilizing a software program, like Fathom, won’t be useful for your business if you don’t have the proper setup of your accounting system. For example, many KPIs and financial metrics track financial information based on fixed and variable costs. If these costs aren’t properly broken out in your chart of accounts, you will be making business decisions based on inaccurate information.
The business owner isn’t going to go in and adjust the chart of accounts and ensure everything is properly flowing into these data-based software programs. Whether the reason is lack of time or lack of understanding, there are other options to promote accuracy. One option is to work with an outsourced accountant who can go through your current accounting system, find areas of optimization, and track the information flow. This takes a significant burden off your plate, especially for an established business.
Photo Credit: Fathom
Summary
Turning on your financial brain is critical to taking a business with a million dollars in sales to a multi-million dollar enterprise. Utilizing a program that provides extensive insight into analysis, reporting, and forecasting is crucial for long-term success. Just as critical is having an accounting system that is set up properly. Reach out to a team member at Basis 365 to schedule a consultation.
