“What is the worst kind of feedback you have ever received? And what exactly made it so bad?” This was a question that was asked at a workshop I attended recently. The room went quiet after being confronted with this question, but the mood quickly turned to deep reflection. People slowly started sharing their personal insights and this gradually ascended into a group revelation, which was;
- “the worst feedback is the feedback that you get long after the event in question has passed; or
- even worse, it’s the feedback that you never get.”
In the accounting and finance world, this equates to receiving information about the performance of your business after the end of the relevant period. By this time, strategic plans and cash flow forecasts may be long out of date. (If this is what your relationship with your accountant looks like, you are due for a change!) In short, the best time to receive feedback about your business is at the time the key event is taking place, so you can front foot your next strategic move.
One of the best ways to get real-time information about the health of your business is to use cloud accounting software such as Xero. Here at 5th Consulting, we love Xero because it’s a user-friendly product and used together with the expertise of an accountant or Virtual CFO it incorporates a financial feedback loop for your decision making.
Additionally, Xero recently upgraded the short-term cash flow and business snapshot features – released in a product called Xero Analytics Plus. I’m excited about this feature, because it uses AI to make projections on cash flow and financial metrics for up to 90 days. These projections are also customisable, with the end-user having the capability to remove and add transactions manually. Various business scenarios can also be added in to see how they may affect future cash flow.
Here at 5th Consulting, we recommend using this feature side-by-side with your accountant or Virtual CFO. For example, any upcoming GST and income tax payments or refunds should be included by your advisor so you can optimise your cash flow decisions and plan for success. Please contact us here for more information.