General Business Forum Brought to you by Salesforce

How to establish really solid reporting in a young business

Discussion in 'General Business Forum' started by JImbo_123, Jul 14, 2020.

  1. JImbo_123

    JImbo_123 UKBF Newcomer Free Member

    1 0
    Afternoon All,

    I'm a long time lurker and wondering if I can try to tap into the unparalleled wisdom of the forumites here for some advice?

    The business that I run has been in a long phase of set up (with ongoing production during this phase) and we are now at the point where we have gone to market and sales are ramping up.

    When we started out we appointed an external bookkeeper to deal with the financial data entry (into Sage) along with an accountant from a moderate sized firm to provide more specialist advice and run our year end accounts. We are now at the stage where we really need some much more detailed reporting function - something which ties budgets, forecasts, actual sales and production together and allows us to analyse performance of our business in much better detail.

    Our book keeper does not have the knowledge of either excel or other stock management/accounting systems to be able to help, I'm not sure our business is at the stage where we need to recruit for a Financial Controller type position and I suspect that our accountant would cost an absolute fortune if we were to ask them.

    Does anyone have any advice on whether there are specilist firms out there who can consult on things like this or packages which might be useful? Any help would be most gratefully received...

    Posted: Jul 14, 2020 By: JImbo_123 Member since: Jul 14, 2020
  2. tony84

    tony84 UKBF Big Shot Free Member

    5,790 1,065
    Do you have a CRM?
    I signed up with Zoho but have also used others and they can run reports. I know how much business I have written and can run reports on when I expect that money to come in. My reports do not need to be as complex as yours but I am sure they can all be done.

    You just need the system to key it all into and then for it to be set up.
    Posted: Jul 14, 2020 By: tony84 Member since: Apr 14, 2008
  3. AllUpHere

    AllUpHere UKBF Ace Free Member

    3,343 1,265
    I've been looking into Anaplan and it's capabilities for a client. If you want an expert opinion, speak to @namesweb on here.
    Posted: Jul 14, 2020 By: AllUpHere Member since: Jun 30, 2014
  4. atmosbob

    atmosbob UKBF Ace Free Member

    4,464 1,053
    Learn Excel yourself. Its pretty easy even I can do it. Think hard about what data you really want and question everything about your data entry. Question how you allocate account numbers and how they sort in Excel.

    (When I started my publishing business I bought a large map and divided my target sales area into 99 towns or areas. my account numbers ran from 0101, my first customer in St Ives to 9901 my first customer in Bournemouth. This meant that any sorting, either in Sage or Excel grouped outlets in area order. This saved me an enormous amount of time and complication over the years. I use this as an example of how forethought can help organise data.)

    After a year or two you will learn that you only need certain management data to be useful. Run properly you can import data from Sage in a few minutes. Using outside help you will never learn whether they are doing a good job.
    Posted: Jul 14, 2020 By: atmosbob Member since: Oct 26, 2009
  5. Chris Ashdown

    Chris Ashdown UKBF Legend Free Member

    11,861 2,465
    Do you own the sage the guy uses or is it their own copy

    If you own it then buy a second licence and you can get all the information there by interfacing into the other version

    Whatever accounting software you get, the management should really learn how to use the basics of it and be able to get the information they need from it

    Many young company managers / owners pass the accounting side to a third party as a easy solution, not realising the great date available to help them manage the company, so basically don't rely on others grab the information yourself
    Posted: Jul 14, 2020 By: Chris Ashdown Member since: Dec 7, 2003
  6. The Byre

    The Byre UKBF Legend Full Member

    10,222 4,220
    What you need is Mrs. Millie Tooley. She pulls a long face and holds a 20-minute lecture every time I forget to get a proper invoice or use the wrong card for company or private purchases. She predicts our cash flow and flags up warnings about buying too much software or building materials or spong or widgets or anything else. She sees to it that people get paid punctually and is the first to query bogus or unauthorised invoices.

    We used to have a Sage warrior, but after a few weeks of struggle and faffing about, both warrior and Sage were booted out in favour of proper software written for us as a simple ledger programme. That combined with Excel seems to keep Mrs Millie Tooley happy.

    For proper reporting with P&L, multiple currencies, stock control, payroll, charts and all that funky stuff, GnuCash is the answer - except that it does not do multiple users simultaneously (yet). If you want adult bookkeeping combined with full ERP (Enterprise Resource Planning) and you don't have a Mrs Millie Tooley, probably SAP is the right way to go.
    Posted: Jul 14, 2020 By: The Byre Member since: Aug 13, 2013
  7. SFH0791

    SFH0791 UKBF Contributor Free Member

    73 3
    One advice I can give is setup a Bespoke software specially for your company needs!! Expensive in the beginning but profitable long term.

    Go to Freelancer, Upwork and hire a freelancer from there to create a software which is completely bespoke to your company showing you exactly what you want to see! One of thing with those platforms is you have to be careful as you need a vision for the products the developers just code!! but cheap!!!
    Posted: Jul 14, 2020 By: SFH0791 Member since: Jun 23, 2020
  8. namesweb

    namesweb UKBF Regular Full Member

    133 16
    Yes it sounds like the sort of software you're looking for - take a look at - a good intro video linked at the bottom

    One piece of advice is to try and strike the happy medium between cost, scalability and functionality.

    Try and avoid the big companies like oracle/SAP as they'll charge a fortune to set you up and you'll forever be reliant on them. Good if you have very deep pockets and can afford to pay for more or less every change needed in future.

    Also definitely avoid DIY solutions like Excel as you'll spend your life (or an analysts life @£xx,000 per year) battling to keep it all up to date and ticking along, and as you grow you'll very quickly realise it'll need a complete overhaul.

    Anaplan by comparison is like Excel but on steroids and can have a lot of analysis/reporting and once it's set up you would have inter-departmental planning capability (so you put in a forecasted unit of sale against a customer, and it can add that unit to your production schedule automatically, but also reflect that revenue/cost in your P&L/Balance sheet).

    Also once you get the hang of it you're able to maintain it yourself at little to no maintenance cost/time. There are a few other tools out there but this one is by far and away the best for these sorts of requirements at the moment.

    Hope that helps - feel free to reach out if you have any other questions.

    Last edited: Jul 15, 2020
    Posted: Jul 15, 2020 By: namesweb Member since: Jan 27, 2015
  9. namesweb

    namesweb UKBF Regular Full Member

    133 16
    It'll end up costing you a load more money for not what you need, and you'll end up with a full time job imparting that vision. Avoid freelancer/upwork for this sort of software like the plague! (Been there done that!)
    Posted: Jul 15, 2020 By: namesweb Member since: Jan 27, 2015
  10. The Byre

    The Byre UKBF Legend Full Member

    10,222 4,220
    That's all very nice - but what does Anaplan cost?
    Posted: Jul 15, 2020 By: The Byre Member since: Aug 13, 2013
  11. namesweb

    namesweb UKBF Regular Full Member

    133 16
    It starts from about £30 per month per gig of space, and you can scale as needed from there. Building it might cost a little bit but nothing compared to SAP/Oracle. If built correctly should give a return on that pretty quickly. A small system can be built within 5 or 10 days, but it all depends on the complexity. Most freelancers/consultants worth their salt should build a small proof of concept free of charge to make sure it is what was needed before proceeding.

    Theres a few other systems out there but they're not as intuitive on the whole whereas there is a lot of community support and videos you can lean on to help you do small things; so you're not always reliant on a consultant. Best of Excel, but much more robust.
    Posted: Jul 15, 2020 By: namesweb Member since: Jan 27, 2015
  12. SFH0791

    SFH0791 UKBF Contributor Free Member

    73 3
    I have built custom software for 2 of my businesses, no issues does what I need it to do not what the other company thinks I need.

    Also, custom software increase company value!
    Posted: Jul 15, 2020 By: SFH0791 Member since: Jun 23, 2020
  13. Financial-Modeller

    Financial-Modeller UKBF Enthusiast Full Member

    782 272
    Several options have been introduced already at various price points @JImbo_123

    I suggest that you need to determine what you're trying to achieve and then use the data/information to help you get there. It is quite likely that the future of your company is highly dependent on just a few drivers, which you may or may not be aware of, and may already be visible among the reporting that you already do.

    It is likely that you do not need to hire a full-time permanent FC to help you, but an experienced part-time FD whose interests are aligned to the business.
    Posted: Jul 15, 2020 By: Financial-Modeller Member since: Jul 3, 2012
  14. busowner987

    busowner987 UKBF Regular Free Member

    204 12
    2nd that.

    I have built customer software as well. It does everything I want it to. However I do have somebody constantly on stand by when it breaks down or does not behave as intended.

    I think back to how we used to manage everything with a4 paper and colours folders. Ewww.

    Going forward I want to completely get rid of paper altogether!
    Posted: Jul 15, 2020 By: busowner987 Member since: Aug 27, 2019
  15. TopSpek

    TopSpek UKBF Regular Free Member

    175 13
    A growing business is like a growing garden - there are so many different things you can do which could contribute to the growth rate. But many ideas for increasing growth need to be implemented and controlled scientifically - hypothesis -> experiment -> observation -> adjustment ... and so on.

    Many years ago I worked a season in a fish'n'chip shop on the North Shore of Blackpool, near Gynn Square - that's the posh end where the civilised tourists stayed - no battered mars bars with tomato sauce up there! I worked hard as a general drudge, and every day I dreamt that one day I would make it to the very top and become the fish fryer! Bill, the owner, was very meticulous about the battered fish he sold. I think he experimented with a few of the variables involved - the thickness of the batter, how moist or dry and crunchy it was, and even the ratio of fish to batter was considered. He said his battered fish was the reason why hundreds of customers came to his chippy each day, and I certainly couldn't disagree - he had a formula for the best battered fish that I've ever tasted. Considering that a season lasts for only 20 weeks of the year, and the chippy probably wouldn't open for the entire off-season, how would Bill maintain his recipe data? Also, how might it be possible to develop another winning recipe such as a pie pastry within, say, the first 10 weeks of the following season, instead of another 3 years which it took him to develop his batter? And how did Bill 'know' that his success was due to his fish batter and not to some other factors?

    A nearby supermarket has four of the loveliest, friendly ladies you could ever wish to meet. Their customer management skills are not feigned at all; they just can't help being lovely; their loveliness comes naturally to them. The supermarket also has one assistant who is not so nice. In fact, she drives customers away with her attitude. I think she is a bully, and she has managed to gather a small clique around her who also seem to have become impatient with customers. All the supermarket assistants work very hard and always look as though they are under a lot of pressure. They work all over the place each doing anything and everything as required - checkout, shelf-stacking, warehouse, office, etc.. A few months ago, Miss Attitude was promoted to supervisor, I assume because of her ability to control other staff members. Considering that there are both public- and non-public facing workspaces in the supermarket, and that patronage and profits could be increased significantly, and that the strong and controlling qualities which some people possess can actually be a good thing if used properly, how would you experiment with the business, and how would you record, query and interpret the data?

    The more you lean towards bespoke software, the more accurately you will be able to model your business system, and the results of your analyses will be much more detailed and will produce more powerful information. Of course you can achieve this to a degree with some off-the-shelf (OTS) applications and frameworks, but for the most part, they are just not malleable enough to become accurate models of your particular business system.

    The overriding question that you need to ask yourself is this: will the more detailed information that you can get from bespoke software be enough to offset the extra cost, and guide you to higher profits than an OTS software system could?

    If you use OTS software, then you will need to compromise somewhat to make your business system fit into it. If you feel unwilling to compromise your business system, and you want your software system to fully reflect your organisation's unique way of doing things, then you need bespoke software.

    The next couple of paragraphs might be a bit boring for most laypeople, and it may seem like I'm stating the obvious, but if you really want to use joined up thinking, then you must consider carefully the joined up components of your business system.

    Just as individuals each have their own way of doing things, organisations also have their own ways of doing things. It may appear that businesses of the same type do things in the same way, but when you go into the details, they all behave differently to acheive similar goals.

    A system uses objects, which, at the database level, we call 'entities'. Each of these entities has one or more relationships with other entities. For example, in an organisation, the following relationship between employees and roles might hold: "each payroll employee may take many roles, and each role is taken by just one employee". Another example: in the upcoming brave new world, "each autobot can make zero or more journeys, and each journey can be made by just one autobot".

    Entities can be physical (i.e. hard) (e.g. employees, company cars, fish, etc.), or abstract (i.e. soft) (e.g. events, sales, roles, etc.). All entities have attributes. For example, an employee might have an ID, a name, a date of birth, a gender, etc.. An autobot entity and its attributes might be summarised as: AutoBot( AutoBotId, XCoord, YCoord, Speed, AutoBotRadius, PersonalSpaceRadius, ScanSpaceRadius, CurrentDestinationPoint ). The point is, you should try to identify the most important entities in your own business system. What attributes do they have? What are the natures of the relationships between the entities in your system? Once you start to make the connections between the various components of your business system, you will start to think that the number of questions and analyses that you could perform on your business is infinite, and your brain may start to hurt!

    It is easy to become overwhelmed during such thought sessions. In order to avoid this, you could start with the following simple question: what data does your business need to record? You need to find the 'scope' of a simple model which will reflect your business system. You could probably think of dozens of entities and entity relationships, and dozens of attributes of various entities, but you should keep your model minimal to start with, and develop it gradually. You don't want to end up with what many other systems have - bloat - it costs time and money; it is mostly useless; and it just clutters your business system and gets in the way.

    Other questions that you could ask in order to help you decide between bespoke and OTS might include: how many entities are in your business system which are not in your chosen OTS system? In the entities which are in your favourite OTS system, are there any missing attributes that you would like to add? That is, are there any other attributes which you would find useful in answering important questions and performing the types of analyses that your business needs?

    So, in a nutshell, if you want the most accurate information specific to your own unique business system, then the information needs to be drawn from your own unique data set - which you have chosen.

    Your own relational database in partnership with the structured query language (SQL) can be a powerful tool. SQL is a very beautiful language which closely resembles plain English, but which can be quickly translated into the logical and mathematical expressions which a database management system (DBMS) can understand. Your plain English questions and intuitions can be easily transformed into SQL queries, which can be passed to a DBMS (e.g. MySQL). Information is returned in the form of tables. Plain English queries can be written in as much detail as you like, and SQL will be able to provide a completely unambiguous expression to suit.

    In a bespoke database, complex ad hoc SQL queries can be created on the fly within minutes and passed directly to a DBMS just as ad hoc problems involving numbers can be passed to a calculator to get numerical results. And just as mathematical formulae can be written into functions which are part of software applications, SQL queries can be written into functions which are part of software applications. Indeed, even the database structure itself can be as ephemeral and ad hoc as you like according to your specific analysis requirements at the time - such as a sales staff appraisal.

    That's enough theory for now. Soon I'll continue this article with some practice. I will take Jimbo's original message and use it as an initial statement of requirements to create a minimal bespoke software system. Just one thing though; as the statement currently stands, I think the resulting set of entities could apply to any business, and so of course a software system based on this would not be very 'bespoke'. If the OP would like to add an extra paragraph of no more than 100 words describing what his company actually does or produces, then I will be able to present a more convincing demonstration of the power of a simple bespoke business model.

    It really is amazing how the physical world around you can be converted into a powerful logic machine which models your business and its own unique way of doing things! And it isn't rocket science - it's computer science! :)

    Questions, disagreements and corrections - always welcome - thanks.
    Posted: Jul 17, 2020 By: TopSpek Member since: Jul 15, 2019
  16. FGCL

    FGCL UKBF Newcomer Free Member

    1 0
    I would recommend moving your bookkeeping to Xero. It's very simple to use, your bookkeeper shouldn't have a problem with day-to-day operations.

    You can upload budgets (from excel), so you can compare to actuals and it has many add-on functions, such as stock control, etc. They have very good customer service and help tools to get what you need.

    I'm a part-time Portfolio CFO, generally for fast growth businesses and this is what I always recommend clients for in-house accounting management.

    An accounting firm isn't great at providing this kind of support. They're great at tax issues, audit and annual returns. However, commercial / management accounting you would consider in-house.

    It may be worth looking for a part-time FP&A analyst/consultant or Management accountant who can help you with with budget modeling and uploading it into your accounting software when you need them. Then consider them full-time when the business grows. A bookkeeper won't be able to do this for you. Financial Controllers also don't specialise in budget creation, rather variance analysis and stock control.
    Posted: Jul 17, 2020 By: FGCL Member since: Oct 9, 2019
  17. Millerd

    Millerd UKBF Contributor Full Member

    40 9
    Hi @JImbo_123

    I agree with the proposal above by @FGCL. There is a big gap between bookkeeping and accountants that provide year-end services and the financial management requirements of a business.

    I have done a lot of work as a remote part-time CFO for SMB's as there is a big gap between the traditional historical bookkeeping and accounting and the financial management and management accounting requirements of an SMB.

    Unless your business is VERY unique there is no requirement for any custom software or building a legacy system in Excel. The online accounting packages like Xero, Sage, Zoho and Quickbooks are comprehensive with many plug-ins and apps that will far exceed the needs of most businesses.

    As a start your day to day accounting should be done inhouse so that the business information is current. In addition, the system should include budgets and the basis for cash flow planning. The structure should provide management with a meaningful picture of the business (e.g. product groups, customer segments, etc). There is also the requirement for a business management system including KPI's for setting goals and targets.

    The role of an external CFO can also include coaching, mentoring, risk assessment, building business value and an external oversight role (similar to a non-executive director). There is some front end loading getting the structure in place but the longer-term role can be limited to high-level monthly business reviews.

    There is no doubt that most SMB's can not afford and do not need a fulltime financial executive but they do need this expertise.
    Posted: Jul 17, 2020 By: Millerd Member since: Feb 24, 2019
  18. Chris Ashdown

    Chris Ashdown UKBF Legend Free Member

    11,861 2,465
    Off the shelf means dependency on it doing its job and most likely getting updates by the maker at regular intervals, often based on users requests

    Custom made offer great chance of long gestation period, high risk of conflict of data and every outside modification solving one short term problem but opening the potential for catastrophe

    For most industries except maybe the very largest, off the shelf software from well established companies will be expensive but fully do the job and retrieve data to another software via a common data link

    For some reason many will accept paying a lot of cash on fixed assets or even company cars, buy bulk at spending a few thousand for the right software that offers growth updates and proven reliability

    Save a few quid buying a cheap or free accounting package and three years down the line pay a fortune to get the data transferred to a new system with hours or days fighting problems and having to run two systems to get historic data. Is that likely to happen who knows, just like those who do not have a disaster plan yet lived in a flood plain
    Posted: Jul 17, 2020 By: Chris Ashdown Member since: Dec 7, 2003
  19. Nighthawk Software

    Nighthawk Software UKBF Contributor Free Member

    67 12
    There are definitely situations where custom built software solutions are worth considering.

    Dont forget that off the shelf software is designed to appeal to as wide an audience as possible - this often means many features that you don't need, which just makes data input far more complicated than it needs to be - a screen full of fields, only 3 of which you need. Often it misses features that you really need, so you end up just dumping everything in the notes fields to try and get by. You end up adapting your business to the software, rather than the other way around.

    then you end up using multiple products to get the job done - Zoho for CRM, Xero for accounts, Monday for project planning etc etc plus various excel documents lying around to tie everything together. Wouldn't it be far easier if all of this was just in one place?

    We just completed an internal system for a company for a budget of around £15k. It gives them full management of their entire business, all in one place. Not only that, but a full portal for clients to log in and view the status of their contract too... try offering that with Zoho/Xero/Monday/Spreadsheet combinations. All fully branded. The feedback from their customers alone made the whole project worthwhile, and has definitely led to them gaining repeat orders due to the transparency and simplicity of tracking progress.

    And all for £15k.. assuming you use that for 5 years, that works out at £250 a month. How much would you pay for software licenses to do the same thing, and how much time would you lose porting data between those systems / looking things up across multiple systems? How much favour does it buy from customers from being able to use that portal to view the status vs having to call and ask?

    Not only that, but because it's your own system.. you can modify it as you grow and your business processes change.

    Definitely worth looking in to.
    Posted: Jul 17, 2020 By: Nighthawk Software Member since: Feb 12, 2016
  20. namesweb

    namesweb UKBF Regular Full Member

    133 16
    Off the shelf does not equal un-tailored. Many OTS systems can and should be customised to the business needs. Some cope better at that than others, and some give you less flexibility than others. The danger with bespoke is you're tied in to their own developers generally unless you're being offered the source code.

    I agree with both CFO/FDs who have posted that Xero with plugins will do a job - to a point though. I think it all depends on the size of the business in question. If it's a very small team, who mainly want information on performance to date and are happy building budgets in Excel and loading in, then definitely adequate but I'm not sure how long term or in depth their forward planning plugins will cope with wanting to explore possibilities or answer those "what happens if..." questions without overhaul or an element of bespoke set up.

    About 6 years ago I worked for and helped set up a 2 man FP&A team for a small/medium sized business in hospitality. They were previously reliant on a single BI guy whos sole job was extracting, transforming data from various SQL databases, exporting to Excel, then providing reports and PDFs to management for various bits. Now this guy was one of the best I've ever come across; he was flinging SQL code like it was paint off a paintbrush, but as growth plans started taking shape, he quickly began to be overworked and it all lead to him leaving; hence why we were drafted in to build out this department. The reason was in growth phase the focus moves from "how have we done?" to "what happens if we...?" and "how does that compare to the other scenario of...?"

    The CFO was relatively forward-looking for the time and saw that if they were to expand shops, or alter the business what they needed was the flexibility to add a new shop or product range and have it slot directly into model they'd already built, but not do it at the expense of a huge FP&A department (for context venture capital backed, looking for a 3-5 year exit so flexibility real key - dont want to hire then lay people off)

    The same question of what if a forecasted price or factory cost changed? All of that needed to instantaneously update the KPIs, bank covenant performance, calculate required CAPEX spend for the next 5 years, show expected cashflow and do it all based on changing a single input.

    The real power there is for management to sit in the system and spend their time asking the "what happens to the business if we...?" questions that will really drive their growth and drive decision making, than spending time trying to re-invent the wheel with a bespoke system, or take processes outside of a partial system, wrangle with a new software and waste time importing back in.

    I agree completely that whatever system you choose should help you drive your business way beyond what it costs to implement. Interesting comment about purchases of company cars costing more than implementing solid business systems though! I wonder how much prevalence there is of that - a flashy Land Rover now or a full fat Rolls in 5 years? I know which I'd choose!
    Last edited: Jul 17, 2020
    Posted: Jul 17, 2020 By: namesweb Member since: Jan 27, 2015