The 3 Basics What A Company Needs
- 1. The 3 Basics – What a Company Needs Bill Sims CPA
- 2. Most companies go through a 3 activity business review cycle during the month. If this cycle is not interconnected and productive then they often begin a process of changing strategies and tactics based on a “whatever works/sticks” philosophy. This is subtle. Most companies do not want to admit that they are operating in such a manner. Below is a description of the 3 basic activities. These roll over each month and start anew with an additional month’s data added as history. The next six slides describe tools which focus concisely on performing the 3 activity business review cycle. Forecast - Forecasting the next month’s performance. Sales Analysis – Profit Lift - Examining customers’ sales and profit. Financial Review - Reviewing last month’s performance. The monthly business review cycle The 3 Basics - What a Company Needs - Bill Sims
- 3. Purpose: Provide a single page i.e. “dashboard” on where the organization is heading for sales and profit. Data Source: Linked Financial Statements and Forecast data using Data Warehousing technologies. Results: Allows the Manager to view on a single page 41 unique metrics on the Unit. Forecast The 3 Basics - What a Company Needs - Bill Sims
- 4. Forecast Finance Disclaimer - All numbers are fictitious in order to create a simulation. The 3 Basics - What a Company Needs - Bill Sims Purpose: Provide a single page i.e. “dashboard” on where the organization is heading for sales and profit. Data Source: Linked Financial Statements and Forecast data using Data Warehousing technologies. Results: Allows the Manager to view on a single page 41 unique metrics on the Market Unit. Weekly Weekly Monthly
- 5. Purpose: Analyze profit contribution at the customer level. Data Source: Linked Data files – No data input required. Results: Allows any user to aggregate customers and sort by profit potential. Sales Analysis – Profit Lift The 3 Basics - What a Company Needs - Bill Sims
- 6. Sales Analysis – Profit Lift Finance Disclaimer - All numbers are fictitious in order to create a simulation. The 3 Basics - What a Company Needs - Bill Sims Purpose: Analyze profit contribution at the customer level. Data Source: Linked data files – No data input required. Results: Allows any user to aggregate customers and sort by profit potential. Customers Summary Rate/Volume Profit Contribution
- 7. Purpose: Provide a detailed review of all revenue and cost cash flows. Data Source: Linked Profit & Loss files – No data input required. Results: Allows the Manager to understand the performance gaps. Financial Review The 3 Basics - What a Company Needs - Bill Sims
- 8. Financial Review Page -1 Finance Disclaimer - All numbers are fictitious in order to create a simulation. The 3 Basics - What a Company Needs - Bill Sims Revenue Summary Purpose: Provide a detailed review of all revenue and cost cash flows. Data Source: Linked Profit & Loss files – No data input required. Results: Allows the Manager to understand the performance gaps. Total Summary
- 9. Financial Review Page -2 Finance Disclaimer - All numbers are fictitious in order to create a simulation. The 3 Basics - What a Company Needs - Bill Sims Net Sales Income Summary Purpose: Provide a detailed review of all revenue and cost cash flows. Data Source: Linked Profit & Loss files – No data input required. Results: Allows the Manager to understand the performance gaps.
- 10. The tools presented provide a detailed and concise view of the review conducted during the 3 activity cycle. They are interconnected. Sales Analysis – Profit Lift & Financial Review - both look at earnings from the rate – (mix and price) and the quantity/unit sales perspective. All customers added together equal the total sales, revenue and profit on the P&L. Forecast & Financial Review - The forecast which is most likely reviewed during the month’s cycle either daily or weekly also has a mini financial statement which shows the progress toward the monthly financial budget. These can be interconnected further by adding elements of both. This ensures each time there is a review the focus is on the final financial goal. Conclusion The 3 Basics - What a Company Needs - Bill Sims