What’s the first thing you think about when you hear the phrase “record keeping?” If you’re like most folks, you start thinking about the IRS and regulatory requirements. However, what you may not know is that far from being a pain, keeping track of the right records can actually be a HUGE competitive advantage. Let’s look at three ways record keeping can become a key driver for growth in your business.
For too many businesses, record keeping is more about compliance with governmental regulation than it is about making better decisions and being able to take better advantage of opportunities. This backwards approach keeps many small businesses from reaching their full potential.
Think about it: How are your decisions informed? Do you have the best information at hand to guide important decisions in your business? Improving the record keeping in your business is a high leverage activity that can make it much easier for you to grow your business and give you an enormous competitive advantage.
This is really about making it easier to get the information that would be most helpful when it comes to evaluating choices and making decisions.
For example, this could mean more accurate records. After all, good data leads to good decisions and bad / missing / incomplete data leads to poor decisions. What pieces of information are you not tracking right now, but would be helpful to have? On your website, you may be tracking visits, but not conversion rate. What financial reports would it be helpful for you to see on a weekly or monthly basis that you’re currently doing without?
Sometimes when it comes to keeping track of information, stuff gets tracked simply because it is available and possibly interesting, but it’s not really actionable. The most valuable records are filled with actionable information.
This is really about speeding the process up. You see, data has a limited shelf life when it comes to helping the decision making process. Knowledge can be powerful, but a big part of that power comes from being timely. Timing is everything. One application of this would be to eliminate that nasty surprise that comes at tax time, by generating the reports before the tax year closes, thus providing the opportunity for appropriate tax planning.
Another way of improving the speed of your records is to reduce the amount of time required to keep up with it all. Making record keeping less labor intensive is about automating what can be automated, doing without what can be done without by focusing on the critical few, and being as efficient as possible in the collection and handling of records.
If you think record keeping is expensive, try only keeping track of the bare legal minimum – the opportunity cost is enormous. The minimum required for legal compliance is not enough to help you make really smart decisions and best take advantage of opportunities. That being said, how can you make your record keeping cheaper?
Oftentimes there is information that is being tracked and entered manually when it could be done automatically. Automating can provide great savings when the time saved over the course of a year is considered.
The records that you keep have an enormous impact on the financial health of your business. Do you have the right record keeping in place to take full advantage of the opportunity that you are pursuing?