In our last post, we talked about the importance of unifying financial data into one source with both quality and timeliness. Doing this gives business owners a road map of where they’ve been so they can make corrections or stay the course.

As any business owner knows, not all financial data is created equally. Just as much as a wrong map will lead anyone astray, poor financial data could lead a business owner into sudden, unforeseen peril. Quality and timeliness are the key to unlocking the power of financial data.

Quality data has many characteristics: it obviously has to be accurate and complete. These are necessary and crucial components. Even then, these crucial components won’t provide the business owner with maximum insight. There’s much more that should be considered and addressed: the “bilities” of accounting data. I may have just made that term up, but for good reason! These “bilities” just can’t be ignored!

• Usability: The data must be easy to read and understand! If it’s overly complicated, cluttered, excessively detailed, overly summarized or just plain hard to use, then what’s the point?
• Comparability: Accounting data really begins to shine when you can compare your data to industry standards and relevant key-performance-indicators (KPIs). If someone with reasonable knowledge of your industry can’t make heads or tails of common revenue streams, costs or expense, then your data isn’t fitting the bill. The data needs to be structured and organized in a way that will allow for comparability within your industry.
• Accessibility: Can’t get to your data? Waiting until the end of the month to see your numbers? Then what good is it? Don’t let an accountant withhold your accounting data from you. You need to be able to access it as needed.
• Affordability: At the end of the day, the value of your data has to at least equal or exceed the cost. Spending an arm and a leg to get quality data won’t be sustainable long term and frankly, just isn’t necessary.

We certainly can’t forget timeliness: our most relevant friend. “Relevant” because quality data loses relevance to decision making over time. The older and older your once beautiful data becomes, the more and more haggard it will be. Your quality accounting data must be updated and maintained on a regular basis, otherwise it will lose all its ability to provide meaningful insight to your “today decisions”.

Keep it quality and timely out there! Your bottom line will thank you!