Time-Saving Tips for Financial Data Analysis

You Know Your Business's Numbers

Despite what your anxiety and your parents or partners say, you do know your business’s numbers. Maybe not every number is memorized, but you signed practically every check and approved the online payments. Spending hours poring over the numbers, especially this year, just isn’t worth the painful reminder, right?

Revenue isn’t what you wanted it to be. Expenses aren’t where they need to be, but at this point what else could you possibly cut? For many, there is a lot of anxiety and stress around financials (both personal and business), even in a non-pandemic year. So why look closer?

Before you get too excited, I’m not saying don’t look at your financial data. All of my CFO training cringes at the thought, to be honest! But there may be a better way than spending hours flogging yourself with financial information. Financial information IS a necessary tool, and it DOES give you important data. Knowing when things are “off” can help right the ship when things don’t go according to plan.

But spending your Friday night and Sunday morning tweaking your financial forecast over and over—let’s be honest—isn’t helping anyone. You leave the spreadsheets more stressed, more confused, and more disheartened. Some days you can’t remember why you became an entrepreneur in the first place. It doesn’t even seem to matter if the numbers are “good” by anyone else’s standard, entrepreneurs are notoriously hard on themselves.

Save Time Reviewing Financial Data

Spend LESS TIME digging through the details. Get the big picture by focusing on the key pieces of information that make a difference for your business and check if you are on track. Make a mental note to make a few tweaks (email your team to cut a few subscriptions here, remind a client their payment is overdue there), close the laptop and move on. So how do you achieve this miracle?

Keep things simple. Set a forecast or target set of numbers once per quarter (you can build an annual forecast if you want, but expect to revise it a couple of times), then put it into automatic mode: Select a few KPIs to compare against that budget in a visual format so you can grasp the takeaway in minutes (cash burn, gross profit margin, accounts receivable balance, net income). Unsure if you are using the right metrics for your business? See our blog on selecting KPIs.

Spend 15 minutes digesting this financial data each week or month (depending on the metric) and MOVE ON. If in those 15 minutes an alarm is tripped (cash burn was WAY HIGHER than expected! Revenue somehow dropped 20% below expectation?!), then you can dig in further. What really happened and why? THEN look at the full profit and loss report. Look at your variance (difference) from the budget report, and think things over for a minute. Was it something you kind of knew about or a complete surprise?

Once a quarter, spend 30-40 minutes (minutes, not hours!) looking at your more detailed report and compare budget versus actuals. Were expenses what you expected? More? Less? Any changes you want to make to your plan? Set the next quarter’s budget based on those goals (spend 30 minutes or less setting that budget) and then get back to your business. Pro Tip: To ensure that you aren’t spending too much time in your reports, set a timer for 30 or 40 minutes. Once the timer goes off, move to your next task.

You know what your numbers should be, and setting target KPIs with a forecast will help you stay on track.

It’s time to spend less time with your financial anxiety. It’s time to automate the feedback loop and spend more time building your reputation as a business and indulging in spreadsheet-free Friday nights. 🙌 🙌 🙌