Do You Know Your Business Numbers?
One company estimates that in the past year, 14 to 17 percent of their product has been returned, which costs the company an average of $19 for each returned bag of seed. Compound that with the knowledge that company representatives and dealers are ordering extra to compensate for not knowing the current inventory, and there’s a big loss.
By using software that provides tracking and transparency, returns can be reduced. Even a 1 percent to 2 percent reduction would be a significant savings throughout the supply chain.
Think about it: Would you ever play a hand in poker with a blindfold on? No. So why would you operate your business blindfolded? If you don’t know, or have access to your business’ key numbers, that is essentially what you are doing.
In today’s world, if you need to make a decision, you must be able to make it instantly and have the ability to pivot, responding to both customers and competitors.
Without knowing these figures, you’re inhibited. If you don’t know how much is being spent and what can be trimmed, you can’t lower overhead costs or expenses.
The numbers I’m referencing are cash flow, net income, profit and loss, sales, price point, gross margin and total inventory.
What if you have the opportunity to hire that scientist who’s doing top notch work? You need to know if you have the materials and capital to support that move.
And who knows … you might have the opportunity to buy a company or be bought.
If you have to calculate these numbers manually or even synchronize multiple files, by the time you get that information, the opportunity might have passed.
This is where business management software can help. There’s software that allows you to track inventory, see multiyear sales history, view customer orders from previous years, as well as integrate into accounting programs.
This type of and level of information is like knowing what you are going to be dealt before the dealer even gives you the first card.
It’s important to note that you don’t have to accept the status quo. Just by knowing your numbers, you might be able to get a hand-up on your competition.