{"id":264,"date":"2026-10-07T09:05:10","date_gmt":"2026-10-07T09:05:10","guid":{"rendered":"https:\/\/ashfield-accountancy.co.uk\/?p=264"},"modified":"2026-10-07T09:05:10","modified_gmt":"2026-10-07T09:05:10","slug":"is-your-business-relying-on-the-wrong-numbers","status":"publish","type":"post","link":"https:\/\/ashfield-accountancy.co.uk\/?p=264","title":{"rendered":"Is your business relying on the wrong numbers?"},"content":{"rendered":"
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Modern accounting software can give business owners access to financial information almost instantly. That does not necessarily mean they are looking at the right information.<\/p>\n

A dashboard containing turnover, bank balance and profit can be useful, but these figures may tell only part of the story.<\/p>\n

Consider a business where sales have increased by 10%. That sounds encouraging. If gross margin has fallen at the same time, however, the additional sales may be producing surprisingly little extra profit.<\/p>\n

Similarly, a healthy bank balance can disguise problems ahead. VAT, PAYE, Corporation Tax and supplier payments may already account for much of the cash sitting in the account.<\/p>\n

This is why useful management information should start with the decisions you need to make rather than the figures your accounting software happens to display.<\/p>\n

For example, a business concerned about profitability might monitor gross margin by product, service or customer. One concerned about cash flow could follow debtor days, overdue accounts and expected cash requirements. A business trying to improve productivity might compare staff costs or hours worked with output or revenue.<\/p>\n

The important point is to keep the list manageable.<\/p>\n

A report containing 25 key performance indicators can easily become something nobody reads. Three or four carefully selected measures, reviewed consistently, may be far more useful.<\/p>\n

It is also worth establishing what should happen when a figure moves outside an acceptable range. If gross margin falls below a target percentage, who investigates? If debtor days increase, when does someone contact customers?<\/p>\n

Management information becomes valuable when it prompts action.<\/p>\n

Instead of asking, “How did we do last month?”, try asking a more useful question:<\/p>\n

“What do we need to know now to make next month better?”<\/p>\n

That small change of emphasis can turn accounting information from a historical record into a management tool.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Modern accounting software can give business owners access to financial information almost instantly. That does not necessarily mean they are looking at the right information. A dashboard containing turnover, bank balance and profit can be useful, but these figures may tell only part of the story. Consider a business where sales have increased by 10%. […]\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-264","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/ashfield-accountancy.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/264","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ashfield-accountancy.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ashfield-accountancy.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ashfield-accountancy.co.uk\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ashfield-accountancy.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=264"}],"version-history":[{"count":0,"href":"https:\/\/ashfield-accountancy.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/264\/revisions"}],"wp:attachment":[{"href":"https:\/\/ashfield-accountancy.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=264"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ashfield-accountancy.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=264"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ashfield-accountancy.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=264"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}