In this series, we look at how data-driven decisions sit at the heart of running a successful business in 2024/2025.
Today, we’re looking at how proactive use of data can improve your small business cashflow, and the overall financial health of your company.
Do you know the positive impact that data analysis could have on your cashflow?
We all know that ‘cash is king’, but keeping tabs on the unpredictable path of your business finances can be hard work. Cashflow can ebb, flow and suddenly dip, leaving you without the working capital you need to trade, grow and expand the business.
How can data-driven decision-making help you get in control of your cash?
Here are five ways that data puts you back in the driving seat:
Enhanced Financial Forecasting
Forecasting apps, like Float and Fathom, take the historical data from your account, analyse the current trends and project your cashflow and revenue forward in time to give accurate forecasts of your future cash position.
Optimised Inventory Management
Instead of guessing when to replenish and buy new stock, data analytics can help you identify the best inventory levels. This reduces the risk of running out of stock or having excess inventory that can tie up valuable cash.
Targeted Marketing
With some analysis of your sales data, you can quickly identify your most valuable customers. This gives you the customer data needed to tailor your marketing efforts, reach the most engaged audience and drive higher revenues.
Improved Pricing Strategies
Data-driven pricing allows you to set prices that are competitive but still profitable for the business. Thorough analysis of the price points in your market help you fix a price that sells, while also maximising your revenue potential.
Cost Reduction
Deep dives into your operational data and spending can be revealing. You can quickly spot the areas where costs can be reduced, budgets can be trimmed and better profit margins are possible – all of which helps to improve your cash position.
Talk to us about using data to improve your financial health.
Putting data-based reporting, key performance indicators (KPIs) and forecasting at the heart of your financial management is a no-brainer. But where do you start?
Our team can talk you through the best way to record, filter and analyse your financial data, so you can make informed decisions that keep your cashflow in a positive position.
