LESSON 36: How to cram the entire mass of information, Articles

LESSON 36: How to cram the entire mass of information, techniques and inside secrets we have covered, into a brief once-a-month report for you to chew over at your leisure

 The whole of this work has been about one central theme. That theme is the control of your business. When you control your business you can use it to give you what you want from life. In order to control your business effectively you have to know how to do a number of things, and […]

36.1 Specific examples of the reports and graphs you should have at your fingertips each month, what they tell you, and how to use them

 The following hypothetical information has been compiled for a typical moderate sized business. It shows you precisely how a great deal of financial information can be summarised and presented concisely in a form you can assimilate quickly and understand easily. It brings together last year’s results, this year’s results, budgeted/planned results and forecast results. It […]

36.2 The Profit and Loss Summary

 The Profit and Loss summary consists of three columns. The first column (Actual) shows the results achieved for this four month period. The second (Budget) shows the planned results for the same period. The third column (Difference) compares one against the other. From the ‘Difference’ column you can spot immediately how you are doing compared […]

36.3 Use graphs to get the big picture – they convey oceans of information in mere seconds

 We have dealt with the Profit and Loss Account first, because that is the traditional way to evaluate performance. However, as we have seen, it immediately leads you into quite detailed questions. I would suggest that before turning to your Profit and Loss Account you look first at a few critical graphs. These will give […]

36.4 How to use the Balance Sheet

 Although in this text we are looking at the Balance Sheet last, in reality it is advisable to start by checking two points using the Balance Sheet whenever you are presented with accounting information. We examined these points in detail, and the reasoning behind them, in the earlier segment on the Balance Sheet, but it […]

36.5 Further points on getting the most from your monthly reports

 The reports and graphs illustrated above are of course not the only ones that can be prepared, or that you may want to examine. Notably we did not show the cash flow forecast, and in fact the only reference we made to cash was the graph showing the likely future bank and the cash shield. […]

36.6 Use ‘Gap Analysis’ to laser-focus your attention on the accomplishment of your goals

 You may remember that earlier in this text we mentioned something called ‘gap analysis’. This is a fancy, yet apt, name for a simple and useful technique. The idea is that you decide on a target you want to achieve, then you see how near to that target you are likely to end up. If […]

36.7 Always remember that plans and forecasts are big picture tools, and you gain far more by controlling the big picture than the trivia

 I am sure that by now you appreciate that plans allow you to control the big picture. There is far less value in attempting to use them to control the details. There will almost always be deviations from your plan, and sometimes they will be significant. Do not expect to hit your planned results exactly. […]

36.8 Four reasons why you need detailed feedback every month

 There are four main reasons why you should insist that every month you get the information we have been illustrating here. These are the reasons. Reason 1: Focus Literally seeing where you are, and where you’re going and where you want to be, all plotted on a graph every month will focus your mind onto […]