Data is the lifeblood of any business, providing quantitative insights on current financial performance and helping to guide crucial decisions for your company’s future.
It follows that, the more up-to-date your data is, the more informed your decision-making will be - making real-time data the ultimate financial asset in terms of enabling sound business decisions.
We have no doubt you’re well aware that real-time data holds immense value for businesses across industries galore. But do you know just how many welcome financial benefits this up-to-the-minute data can bring to your enterprise?
Today, we’re lifting the lid on real-time business data, exploring the many perks of going real-time and sharing some expert tips to help you tap the full potential of the real-time financial data available within your company.
First things first: what is real-time data?
Real-time data is data that’s processed at the same time as it’s collected - resulting in almost immediate data output.
The immediacy of the data enables immediate analysis and near-immediate decision-making. This is highly powerful in fast-moving industries where things are always evolving, and so not keeping up means being left behind.
With a constant flow of valuable data coming from various integrated sources to build a full picture of your business’s current performance, real-time data means minimal effort when it comes to data extraction and absolutely no waiting.
The benefits of real-time data for your business
Real-time data is especially useful when it comes to your business’s finances, as financial decisions often need to be made in a reactive and agile way. Helping you to avoid going off course and to maintain the financial health of your company, real-time data is an ever-present asset that will change the way you approach data analysis and data-led business strategy.
The financial benefits of real-time data are numerous, including but not limited to:
- Improved business performance monitoring: there’s a lot to be said for the peace of mind that comes with having constant oversight of how your business is performing financially - and the more up-to-date your performance data, the more reliable the conclusions you can draw will be. From identifying patterns in customer payment behaviour to having a better gauge of your current cash flow health, real-time data is a superior alternative to periodic reporting and makes speedy decision-making dramatically easier
- Informed cash flow management: effective cash flow management is essential to keep your business in the black and running efficiently. With real-time data on where your business is losing money, you can make agile decisions on where to conserve and reinvest your company capital. Real-time data also proves valuable in helping you to build an accurate picture of how cash flow fluctuates throughout the year, so you can use this timeline to your advantage - investing and conserving money when it makes sense for your business
- Data-led financial forecasting and budgeting: proactivity beats reactivity any day and, with real-time financial reporting, you can take forecasting and budgeting by the reins for a more accurate outcome. Again, the advantage of not having to wait for periodic monthly or quarterly reports is that you can measure and analyse financial data up to the minute. This means being able to forecast further into the future, and with confidence, knowing your data is reliable and up to date. Similarly, your projected budgets are likely to be far more accurate with the help of live reporting on past expenditure
- Streamlined business operations: back on the subject of cash flow, real-time data on the proportion of time and money being spent by various departments and on various duties within your business can help to quickly flag wasted resource and highlight any efforts delivering a poor ROI. The sooner this wastage is spotted, the more valuable time and money your company can claw back and divert into more productive areas. You’ll feel the efficiency benefits in the form of newfound time within your team and improved cash flow health
Tips for making the most of your real-time data
Now you’re well-versed on the benefits of embracing real-time financial data in your business, it’s time to find out how you can perfect the process of real-time data generation with an airtight strategy for success.
As with any business-based plan of action, your real-time data strategy should be considered and purposeful from conception to execution for the best results. Here are a few of our top tips for maximising the value of your business’s real-time financial data:
- Perform a business data inventory: before implementing your data strategy, the crucial first step is to do some recon on your existing setup. Start by identifying the various software platforms you access monthly or quarterly to gather data on your business’s performance and conduct a review of each to establish whether having that data set available in real-time would benefit your business operationally. Following this review, you’ll have a shortlist of the priority data sources for your upcoming real-time data dashboard
- Identify the metrics that matter: next, you’ll need to drill down another level. Consider which specific metrics you need to have one eye on at all times based on your shortlist of must-have data sources. Each one of your data sources will contain a plethora of data that may, at some point, be useful to your business - but the bar for admission to your real-time data dashboard is being essential. Which are the metrics you can’t make day-to-day business decisions without? Which data blindspots would be actively harmful to your business’s financial health?
- Find your single source of truth: Before leaping with real-time data, it’s important to establish a single source of truth (i.e. a central repository for your data that you can trust to be complete and accurate). This decision affects those that follow, as your trusted real-time data will be your go-to source for any future financial decision-making. One example of a single source of truth might be a holistic real-time data dashboard created via your cloud accounting software of choice. Dashboards like these can pull a diverse range of data points from numerous sources into a single master view for easy access and analysis
Are you ready to reap the benefits of real-time data for your business? Investing in cloud accounting software like Xero could unlock this powerful business asset. Contact the Harlands team now to learn more about the benefits of cloud accounting and the small business owner’s trusty companion that is real-time financial data.