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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 businessí 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 itís 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.

 

Designed by Joel Stauring of Multiman Enterprises LLC.

Last updated 06/13/2009