Now more than ever, use data driven decision making to make the best decisions for your business

Nobody knows a business better than the people who own and work in it, but when everything around us changes, making decisions on past experience alone might not be enough to get the job done and help us sleep at night.

Rapid change is a dominant feature of the current economic crisis and business decision making needs to be able to evolve at a similar speed. These decisions can be the difference between a business surviving lockdown or leaving it in a perilous state.

What can data driven decision making do for your business?

Data driven decision making can provide a key supporting role in business planning. Understanding the data your business already holds, at the very least, will help you to make decisions which are more likely to be beneficial.

The most useful data is that collected in real time, generated from your systems as of today, and also some realistic forecasts for the future. There is little point in basing decisions solely on data which is out of date, even your most recent set of management accounts may bear no resemblance to the real time economics of April 2020.

Real time data visualisation tools like PowerBI are key for enabling businesses to extract, understand and view their data as it updates. Data visualisation tools allow decisions to be based on what is happening now, not what might happen, or what has happened in the past in a completely different economy.

Visualising data

Visualising the data can show at a glance when a “red line” is crossed, or where outliers exist. Or it might just give you a clearer view of a trend from a large set of data.

It is important that businesses create data visualisations and dashboards that are tailored for the needs of the business, different businesses run on different KPI’s. Our Data Insight team can advise you on what works well in different sectors and what KPI’s you might not currently be using.

Examples of data and visualisations

These are some specific Covid-19 related examples of data and visualisations that you might want to consider for your business, and why they could be valuable for decision making:

Data you probably already
have
What it can tell you
Cash at bank, daily trends and forecastThe key KPI for many businesses – more critical than ever
Daily cash collection, including prior period comparison Continuing sales are great, but cash collection is what really matters. How does it look compared to the previous day/week/month/year?
Debtor days, by client, including prior year comparisonAre debtors stretching out? Who is now going beyond your agreed terms? For really old debts, can you make a VAT bad debt relief claim now? Are there businesses you should consider ceasing supply to? Is it easy to see which clients are stretching out payments?
Direct debit mandates cancelled (daily update)Do you know which of your clients pay by DD? Have they just cancelled them? Why? How will you now collect the cash for the services you might continue to provide? Are they in trouble, or just hoarding cash?
Sales pipeline, including prior year comparison and who any leads are currently withIf your business is continuing to operate, it will be harder to continue sales. Is there a central register of enquiries and if so, are conversions from enquiry to engagement being tracked? If everyone is working from home, how much drop off in sales “won” is occurring and what impact is your business suffering from leads which are allowed to go cold?
Sales pipeline by person, including prior year comparisonIf you are continuing to operate but having to use furlough, don’t furlough your star sales person. Is everyone converting leads into sales?
Staff productivity, by person If you are continuing to operate but having to use furlough, use the data you hold to ensure you aren’t furloughing the staff (who might be working from home) who are in fact the most productive
Payroll, including sick and furloughed staff, by personWhat is your real time calculation of the cash cost of paying active and furloughed staff and when is that due to be paid? Have you adjusted wages for furloughed staff? When have you forecast CJRS funds to come in?
Staff who are isolating or ill due to Covid-19, by person by dayIf you’re an SME, what SSP will you be able to claim back. If you have furloughed staff, what funding under CJRS are you likely to get? When is that forecast to come in within your cashflow forecasts?
Furloughed staff who were on variable pay, by personThe claim for staff on variable pay will need to be calculated – there are detailed rules on what can and cannot be included and the period you use to calculate the amount of the claim. What funding under CJRS are you likely to get? When is that forecast to come in within your cashflow forecasts?
VAT. Liabilities and payment due datesVAT payment deferral is automatic up to 30 June 2020, but the deferred amounts are to be repaid by 31 March – what headroom is being created now, but what does that headroom then look like in Q1 2020 when the repayment is due.
PAYE and Corporate tax. Liabilities and payment due datesTime to Pay might have been agreed with HMRC. What headroom is being created now, but what does that headroom then look like when the agreed repayment is due.

An example from a dashboard

Contact us

Our Data Insight team are able to cleanse and connect data from a wide range of accounting systems and databases so that a business can have a clear, single sited, view of their business critical data. We’ve even done it ourselves so that partners have a clear view across the firm of a wide range of business critical data.

For further information or to find out how our Data Insight team can help your business, please contact us at advice@taitwalker.co.uk.