Operational or finance reports, which is more important?
Reporting is a tricky little devil. Too much and you end up with analysis paralysis. Too little and you’re left without a compass.
The interesting bit about operational reports is that they are mostly activity-based. It tells you how busy you were in what areas, efficiency, delayed orders and things of a practical nature regarding the delivery machine or engine in the business.
Finance reports, on the other hand, tell a very different story. They’ll tell you if all that activity you’ve generated down in the engine room ended up making you money or losing your money. Or if you even got paid for all those orders you just pushed out. So your highly-efficient operations department could be just that.
Both interesting reading but a little useless on their own. You’ve got to combine the two if you’re going to run your business seriously. And considering we’re in the information age it's almost a given.
Think about your operational reports in the same way you would your smartwatch on a run or a cycle. While you’re exercising, you’re focusing on heart rate, distance, speed and calories burned. But only when you sync your workout to your phone do you actually see where you’ve travelled, where you started and where you ended up. In other words, the operational/doing reports only really make sense when you sync them with your financial reports.
Unfortunately, being busy doesn’t always convert into making money. If that was the case, we’d probably all be loaded. The real trick is to see and understand what going on in your engine room and making sure that’s converting into cash and the only way to do that is to check the numbers