December 30, 2010

The monthly pains

You haven’t read the heading wrong. The main theme of this blog, as some of you may wonder, has not changed either.  :-) The subject of this writing is the report preparation that needs to be accomplished naturally in all companies at the beginning of each month regarding past performances.

One of the first questions we ask our clients is whether their company has a budget. As the size of the companies increases they also become more professional and we get more and more affirmative answers. With SME’s, the answers we generally receive are confusing. Even if the answer is “yes”, the report we are given is not always a real budget.

We can only say that something is expensive, thin or successful by comparing it to a similar alternative. The success of a company is assessed by considering if it has reached its aimed turnover, profit and similar values. The forecasted values are seen in the budget while the comparison of the realization against the budget is recorded in the monthly reports.

The prospective partners relax when they see your budgets and monthly reports. Then they assume that you are in control of your business. They judge your knowledge and grasp of your business by the way you interpret the values shown on the monthly reports.

You might think that it is illogical to put on paper each month what you already know. Moreover, like some businessmen think, you might say “Who can know what the future will be?”. If you are the sole owner of your company, then you do not even need to convince yourself with such words. However, having a partner changes the situation. Especially, if that partner is not working in your company you can present the status of the business to him/her only through reports.

Even if at first they are seen as painful, monthly reports will be your indispensable assistants to help you in giving the right decisions and in your way to partnership.

Wishing you great reports in all areas of life in 2011…

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