5 key things your MI pack should include: Mind Your Own Business – Episode 48

5 key things your MI pack should include: Mind Your Own Business – Episode 48

This week, we’re talking Management Information or M.I. Now come on stay with me I will keep it top level and interesting, I promise It is really important that you have a specific M.I. pack that you’ve agreed with your finance team and it’s also really important that that M.I. pack is delivered to you by a specific deadline every single month and when you receive that information you should be confident that it is complete and accurate. I believe there are five key thing that you need in that pack a P&L a Balance Sheet a Cashflow Forecast a Creditors and Debtors List and a Top Customers List.

So let’s go through those items one at a time First of all, your P&L Now, I don’t think it’s very helpful just looking at your P&L for the previous month or the year to date You need to be able to compare your actual figures to your budgeted figures That way it’s very easy to pick up areas where you are underperforming and over performing.

Next up is your balance sheet and your balance sheet is incredibly important I know it’s one of those documents that business owners tend to shy away from because there’s a perception that it’s really difficult it’s not it helps you understand what you owe It helps you understand what you own it also gives you really good information around where the cash in your business is stuck and if you have any cash problems that’s the document you want to look at. If you are a growing business, you want to keep an eye on that balance sheet so you understand how debtors, creditors and work-in-progress is performing and if it’s likely to create any issues in the medium to long term.

Next up, you need a cashflow forecast Cash is the most important resource to manage in a business More businesses go bust because they run out of cash than run out of profit Cash is critical and if you don’t have a forecast that gives you the visibility of what your cash position is likely to be in the future then you can’t respond in good time.

Next up, your debtors and creditors list those are pretty obvious you want to know who owes you money, how late that money is, you want to understand who you owe money to It’s good practice to go through those documents and to understand where the cash is stuck or who you might be paying too fast or too slow.

Then finally, your top customer report You want to understand which customers are spending more, which customers are spending less, what’s going on with those top customers and keep an eye on it If something’s not quite right, there’s time to respond. So those are the top things that I think will help you are your team manage your business and manage the performance of your company really well.

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Marco Soares is an award-winning business coach in Sussex and is available if you’d like help implementing these tactics.

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