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The most successful landscape businesses are those that are able to make real-time decisions. They recognize if a job is profitable—or not—and can make important changes before it’s too late. A company like this paying attention to “daily numbers” and not waiting until the end of the month to review vital metrics when it’s frankly too late to act.
Oftentimes, keeping an eye on daily metrics can be the difference between a business that takes things to the next level and one that stays the same. If you’re truly looking to continue to grow by boosting efficiency and increasing profitability, then you must become the type of CFO that makes a “numbers review” part of his or her everyday tasks.
Job Costing in Real-Time to Determine Profitability
Far and away, the most important daily numbers that you should be looking at come down to those needed to perform job costing. For landscaping businesses, there are five main data categories that you should be tracking in order to produce job costing data. These include the following.
- Subcontractor Costs
Unfortunately, if you’re like a lot of landscape business CFOs, you might look at job costing as a form of historical data. You’re looking at the data from each of those categories but not until the job is already completed. This can help you tell which jobs were “winners” and which were “losers,” but only after the fact.
However, if you are going to get a better grasp on your profitability and be able to make valuable decisions before it’s too late, you need to be able to look at job costing data in real-time. There are a few benefits to real-time job costing.
For one, by looking at daily operations and how any given job is performing, you are able to provide your crews with measurable goals that they must meet in order to achieve profitability. If they don’t know what goals they should be aiming for, they have no way of hitting the mark. Real-time job costing provides “direction,” which all crews need in order to help you reach your goals. In fact, with this data at your fingertips, you can even create employee incentive programs using those measurable goals.
Of course, accurate and real-time job costing also allows you to make changes when they’re needed. By analyzing how close your estimated costs are to your actual costs, you can make changes that will get a job back on track. This can mean turning a losing job into a winning one.
A Cash Flow Analysis to Review Financial Wellbeing
As the CFO, an ongoing cash flow analysis is a vital business task that falls into your lap. Cash flow analysis is a metric that measures exactly how much cash is coming into the business—and how much is going out. This quantifiable figure will help give you a good understanding of exactly how the business is performing and looking at it regularly is important.
Just like job costing, a cash flow analysis can help you make quick decisions that will be vital to your company’s financial health.
Using a daily cash flow report you can help manage the company’s cash on a regular basis much better than using your checkbook or an online bank balance. That data is simply not accurate in that it does not take into consideration outstanding checks. This can put you into a serious cash crunch and jeopardize the financial health of the business.
Stay on Top of Daily Expenditures, Too
Another set of numbers that you should stay atop of on a daily basis is your company spending. This is obviously part of an overall cash flow analysis but is worth a separate mention as sometimes this task is not performed as thoroughly as it should be.
Tracking every single business expense (including the small ones) really does matter. After all, you need to know where your money is going. Without this level of “financial awareness,” you could be putting the business financials at risk over time. Fortunately, you can prevent major problems by staying on top of these numbers rather than suddenly being blind-sided when you realize spending has gotten out of control.
While big spending is almost always well-tracked, it’s the small spending where businesses sometimes struggle. It’s worth noting that tracking daily expenses should even include office expenses that might be easy to overlook (coffee, office supplies, postage, etc.). While these expenses are minor, they add up.
In addition to always knowing where things stand, tracking daily spending will also provide you with many benefits. For one, you’ll be able to analyze whether your money is being spent as wisely as possible (or if improvements need to be made). On top of that, you’ll also be prepared to benefit from tax season. By keeping close track of expenses, you’ll be able to get the most out of the deductions that you’re eligible for.
While we’re not saying that you should be spending all day looking at expenses as they occur, keeping a watchful eye and a finger on the pulse of any cash going out of the business will ultimately be a smart business move.
The Importance of Visual Reporting for CFOs
When it comes to being able to look at these daily numbers quickly, you want something that you can read at a glance. Reading through loads of data can be time-consuming, which is why visual reporting is an essential tool when it comes to making decisions based on this data.
Instead of spending hours reviewing and manipulating data to get the answers that you need, with visual reporting (which extrapolates data and puts it into an easily viewable/readable form such as a chart), you can make decisions quickly based off of what you see.
Accurate and Real-Time Data for the Savvy CFO
As the CFO, you are responsible for developing and maintaining the financial well-being of your organization. This is no simple task. Particularly if you are a company that is still using QuickBooks and spreadsheets to analyze your data. The tasks that we’ve talked about above really do need to be performed in real-time in order to be most effective but that’s simply not possible with QuickBooks.
The truth is, only a robust and comprehensive software solution like Asset is going to be able to support you in your efforts to produce daily reports and look at financial data in real-time.
The introduction of our iKPI (Include Key Performance Indicator) tool also gives us visual reporting capabilities that allow CFOs to make those quick and data-driven decisions that they often need to make. This dashboard tool is honestly a “game-changer” when it comes to making well-educated decisions. With the support of this visual tool, you can literally now have all of the data at your fingertips, ready to use.
If you’re ready to see how landscape business accounting software, with the support of a dashboard tool, can help you stay on top of your company’s financial wellbeing, let’s explore and see what our products can do for you.