Financial
Management
Whether you need to improve cash flow or profitability, a
management information system tool such as a benchmark, scorecard
or dash board can help you. The financial management tools can also
help you if your business seems fine but you would just like to
make it perform better. A management information system tool used
in conjunction with an Advisory Team or Business Advisor can
enhance your business success.
What is a Management Information System?
Management Information Systems (MIS) are a decision making tools
that allows you to track several key indicators in your business
simultaneously. Imagine looking at one sheet of paper and
knowing what is happening throughout your business. MIS
tools let you see problems before they become losses on your
profit & loss statement.
Let
Multiman Consulting use a MIS tool to help you improve your
profitability, reduce costs, or both. Multiman Consulting can
develop a program tailored fit to your business needs and
goals. A MIS allows you to make better business decisions,
faster.
What is a Budget?
A
Budget is an estimation of the revenue and expenses over a
specified future period of time. With a budget, you can go beyond
the normal profit & loss statement and add in a cash flow
statement to see where the cash flow problems might be.
A
budget provides a guideline to help you control spending. By
comparing your actual spending to a budget you know when you
overspend and you can identify problem areas to better manage
them.
What is a Benchmark?
A
Benchmark is a standard against which the performance of a company
can be measured.
With benchmarking, you can compare your business’ financial
performance of one month compared to the next month or this year
compared to last year. Benchmarking allows you to compare your
business to its peers through industry averages. A benchmark
helps you to identify in which areas you are better than the
industry and in which areas you are weaker.
What is a Score Card/Dashboard?
A
Scorecard or Dashboard is a collection of up-to-date production
and financial data that briefly tells how your business is doing.
A Score Card is like a school report card. You see how you are
doing at a specific point in time and you compare your current
"grade" to your goals and see what progress you have made and what
you have yet to do. Just as the dashboard on your car gives you
brief information from several systems simultaneously performing
in you car, a business dashboard does the same for your business.
A
scorecard or dashboard should include both lead and lag
indicators. Lead indicators are preceding indicators on what your
income and expenses will be in the near future. Sales calls are a
great example in many businesses. The number of sales calls you
make this week will likely determine future sales. Lag indicators
are indicators after they have already happened, such as your
profit & loss statement. It's important to watch both to make
sure you are focused and on track with your goals.
Multiman Consulting can develop a dashboard that fits your
business goals. That way you can track your success.
How can financial management help me and my business?
Are
you effectively managing costs? Do you know how your business
compares to your industry's peers? Do you know how to track your
business progress?
Managing business information especially financial information is
something most business owners dread and therefore never do. If
it’s not your strength, hire someone to do it for you. Management
Information Systems allow you to see production and financial
problems before or as they are happening. It's like an early
warning system that alerts you that your business is
underperforming. Once it tells you there is a problem, it can
identify what area needs your attention. It can help you make key
decisions faster.
The
cost of financial management often pays for itself. Most
businesses can improve profitability more than what the service
costs.