I mentioned on Monday that one of the secrets to weight loss is stepping on the scale each morning. The information you receive from the scale is critical to monitoring your weight loss progress. Similarly, getting the proper data about your financial situation is critical to monitoring your wealth accumulation progress.
But getting the raw data will not make the same impact as getting the right information in the right format via a good report. Yes, I can monitor my weight by stepping on the scale each morning and in my mind comparing today’s weight with yesterday’s weight. But what if I could get a report from the scale that told me even more? What if I could program the scale to automatically tell me how I was doing compared to my goal? What if the scale could report to me the amount of water I lost/gained or the amount of fat I lost/gained? That information would be even better than simply knowing my weight and would allow me to lose weight more efficiently.
The same is true for our financial reporting. The first step in financial reporting is to have accurate data. Just like we want to have an accurate scale to report our weight. Accurate data comes from good accounting. If you do not have good accounting, no report in the world can get you the information you need. Remember – garbage in = garbage out.
But even if you have good accounting, that doesn’t mean that you are getting the information you need from that data. Most of us do not have the time or inclination to do a detail review of our financial data every day or even every week. Good reports can solve this problem. That’s why in our strategies, we spend an entire month going over reporting and how to create reports and how to get team members to produce the reports we want.