Innovate Forward #3: Does Your Company Have A Real-Time Reporting Competitive Advantage?
INNOVATE FORWARD #3 by Dixie McCurley. Click here to view all episodes.
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In A Crisis, What’s the Competitive Advantage Real-Time Reporting Delivers?
We’re in a season where exceptions to the rule are quite common. For example, landlords are giving companies months of free rent. How is your business reporting on this discount and how are you keeping it in the front of your mind so you don’t lose sight of an expense that will come back later? Making it relevant today is now important.
There are countless confusing situations with this pandemic. What if revenue shifted dramatically? What percentage would these influx expenses be of your income? What’s your break-even? What is your usual headcount beyond this? How do you compare it to what was received from PPP?
To be able to track different versions and scenarios delivers an advantage to your company. With dimensionality and report groups offering different hierarchies in Sage Intacct, you can create COVID-19 hierarchy and an associated budget. Loading these scenarios is also important to not doing all of it in Excel which is another preventable nightmare in the works.
Trusted CFO Solutions helps companies see if they’re going to run out of money, understand their administrative costs, and cut their budget (or a portion of it) to resolve the financial discrepancies. This pivot is what budgeting and forecasting are designed to accomplish; where are we not going to lose enough cash, so we’re able to survive and not go bankrupt?
How Far Out Do We Look At Numbers?
When we started with the PPP crisis, we looked out at least eight weeks. Then it became very apparent it would go beyond eight weeks. Now that the new PPP law has changed, we’re looking out for twenty-four weeks.
We’re also looking out at least one year; we suspected this pandemic was going to have up to a 36-month impact. Our forecasting has shown that it will take some companies two years to come back, perhaps longer (or not at all) for others.
Great Business Pivot Examples
For example, a catering company that had a full schedule of weddings booked this summer had events postponed or canceled. Upcoming for them is the expected Christmas catering season. Will catering survive the next 12 months? What about next year’s weddings? Not fully considering the extent of the pandemic, we’re expecting the seasonality will force businesses such as catering companies or hotels to require two years of normal event and travel bookings to full recover. If the pandemic persists, it could be even longer.
In other areas, like software, companies aren’t experiencing that level of negative impact. They may only need 24-weeks to get back to normal. How do they plan for a ramp-up?
Some companies are going through growth never imagined. We’ve got a chemical company client that sold isopropyl alcohol. They had higher sales in the first few weeks of the COVID-19 crisis than for all of 2019. This company was already digital, poised for growth, and had e-commerce in place. This gave them a strong advantage over their competitors that lacked these ingredients. Companies will win with a digital strategy and established e-commerce already. Real-time reporting magnifies these strenghts.
These excellent examples of how companies have pivoted quickly to the cloud and remote operations have promoted new ways of doing their work and real-time reporting allows them to effectively experiment and know where and how that can grow their business.
If you don’t have real-time reporting, but want to explore it further, click here to contact us.
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About Dixie McCurley — Co-Founder of Trusted CFO Solutions
Never able to fully identify with the stuffy title of “accountant”, Dixie McCurley set out to revolutionize accounting practices for small- to medium-sized businesses by offering a new way of thinking about the process. With a unique method that capitalizes upon the latest technology, she walks each client through their pain points. In 2019, she was awarded the Financial Leader of the Year award for innovative solutions in finance.
Click here to learn more about Dixie.