If the data isn’t reliable, there are more chances that it will affect business decisions and can make a negative impact on the company. Mckinsey’s research shows that ineffective decision-making leads to a lost working time of 530,000 days and wasted labor costs of 250$ million per year. So where is the data? Maybe it’s not the most suitable pickup line.  In reality, the owner or CFO hears so much about data that it becomes white noise now. Ultimately, it must be at the core of decisions related to business.

However, one must be mindful of bad, good and no data in the data world. Not only this but other data classifications should also be considered that includes quantitative, qualitative, subjective and objective data. Data regardless of its form needs to be considered as good data after analysis, which results in actionable strategies. But, all data isn’t the same, that’s why sources need to be monitored. Finally, the point is that what’s essential for decision-making is accurate and unbiased data.

How does Online Accounting Software Increase Accuracy and Efficiency?

Online accounting software is helpful in financial sectors as it can better assess and predict loan risks. For organizations wanting to increase value, online bookkeeping services are the best way to reduce financial risks and assist in loan approval.

Assess and Improve the Financial Data Quality through Online Accounting Software

Take a further step, to get a sense of the issue at hand, even before discussing the data quality, there is a query of who can access the company’s financial data in the first place. Not all employees can easily access the data they’ve collected, even though many of them don’t know the source of reliable information that is needed for daily work. If the company team has access to financial data then they must assess the quality. That’s why various factors should be considered such as the nature of the data collected, the number of inputs and its usage.

The following questions should be addressed before assessing the data quality:

1) What is the error degree? How exact is the data?

2) Is the data unstructured, haphazard or consistent?

3) Is the data applicable or timely? How relevant is this?

4) Is the data set cover what is needed or is it complete?

5) Is this financial data sufficient for actionable analysis? How comprehensive is this?

Once the owner should carefully assess how the data quality can affect the decision-making process? Are the data-informed or are the decisions 100% data-driven? Data usage can affect business outcomes. Let’s understand this with a data-driven decision example: any company wants to determine what its next blog post will be about, based on how many likes a post received on LinkedIn this week.

A data-informed decision might consider “likes” and other factors such as graphics used, time of day, etc. In simple words, make sure that the analysis covers all elements range that has the potential to affect resulting decisions and the data. Companies also need to create and establish solid online accounting software for data practices. The awareness and need for good actionable data should be reinforced and communicated at organizational levels.

For this purpose:
1) Communicate good quality values to the decision-making process, and reinforce the requirement to access data and its sources regularly.
2) Don’t complicate the message and keep it simple using online accounting services.
3) Explain the process clearly and concisely that helps in accessing the data, investigate and encourage these techniques so that they become an ongoing enterprise process.
4) Reinforce the company mission and how all decisions should support decisions.

Positioning the company is crucial and it can stand its success by avoiding these pitfalls. It’s necessary to develop financial knowledge and literacy to overcome and understand business challenges.

Create Better Financial Decisions

1. Perform Financial Statement Analysis

2. Evaluate the Financial Impact of Initiatives and Projects

3. Learn How to make Budget

4. Involve the Team in Decision-Making

5.Track Financial Performance

Financial statements are the most crucial resource at the decision-making point. The CFO should not only know how to read them but also analyze and interpret the financial data. Considering the numbers in the balance sheet indicates the current financial position that predicts the failure or success rate.

By evaluating the cash flow statement, the CFO can gain insights into how cash is generated or used. Reviewing the income statement helps companies analyze how the business is doing by comparing it with the expected performance. These statements reveal the company’s valuable information like its’ profit and losses from the past few years and the factors that hinder or contribute to the growth. With this information, the CFO or CEO can make more informed decisions about the allocation of resources and can work effectively towards its goals by acquiring online automated services.

Track Financial Performance Through Automated Bookkeeping Solutions

Understanding past and current financial performance is essential to sound decision-making. Evaluating financial key performance indicators or KPIs like return on equity, working capital, and gross profit margin can assist in understanding a company’s financial health. Not only this, the whole team contributes to make strategic decisions.

Profit and cash flow statements are useful for tracking how the firm manages money and grows, which will help in deciding relevant resources and people to chase its goals. These all strategies are achievable through online bookkeeping services that provide ease of work, simplify tasks and reconcile financial statements.

Why Should Businesses Opt for RecordMe?

Businesses are surrounded and shaped by data. In reality, it’s more like a data firehose. For this purpose, it’s crucial to know which data is needed for particular decision-making and which isn’t. For reliable results, it’s an even greater need to verify whether a company is using bad or good data. To get reliable results, online accounting software is recommended as it communicates properly and has all the essentials that a company needs. If a company wants to look at goals of taking the best actions then make sure to start with RecordMe.