Meaningful Numbers are a Central Theme at CFO on Speed Dial. 

That’s because having and using meaningful numbers is the foundation for our entire framework for building business and financial success. If your financial reports are not meaningful; then they can’t do the job you need them to do — which is to make informed decisions about how to keep your company moving ahead strategically.

In 3 Systems to Fast Track Business Growth and Boost Finances, I outline the four characteristics of meaningful numbers:

Meaningful numbers are

• Accurate

• Up to date

• Accessible

• Actionable 

In this post, I’m going to dive in a bit deeper to show why each of these is so important and provide three tips for how you can consistently make your numbers more meaningful. 

What are meaningful numbers? And how do I get them?

#1 Good numbers are accurate, they contain real information based on solid facts.

Maintaining clean and accurate records is the whole point of the bookkeeping process. Checking and double-checking each bill, invoice, deposit and payment is a systematic method for making sure that each dollar in and each dollar out is recorded correctly. 

One important benefit of this process is that it also safeguards against fraud or theft -- especially if you have two or more people working on your accounts. With a team double-checking each other it’s easier to catch errors, or worse.

If your books aren’t accurate you could be missing expenses, double-counting sales, or putting things in the wrong categories (which then screws up your budgeting). Over months or years, these errors really add up and can result in huge problems for you and your business. 

When you have accurate financial records you have reports you can rely on to understand how the business is performing. AND you can use that understanding to inform your financial decisions. 

#2: Dialed-in numbers are up to date. 

Old data is just as bad as wrong data. If your books are behind, then your financial reports can’t give you a clear picture of where you are today (which is probably when you want to use them to make a decision).

For a retail business with large swings in sales from day to day, I recommend getting sales and expense data up to date each week. I also expect each of our clients’ monthly financial reports to be ready within 2 weeks of the following month. That’s when we review the financial reports in-depth — looking for errors or issues with the bookkeeping and examining trends in the business.

The sooner you can see a dip in revenue or a spike in expenses, the sooner you can react to stop the slide.

Or, if sales are booming, it may be time to ramp up production so you’re ready for the increase. If you don’t catch the beginning of a trend, you can’t act quickly.

Beware of outdated information which can give you a false sense of security when you make a spending decision or unnecessary fear about upcoming bills. It's always better to know the truth and make decisions based on that rather than to be blind to what’s happening. 

#3 Meaningful numbers are accessible.  

There are two parts to accessible numbers.

First, accessible numbers are easy to find. 

If you’re constantly searching in old emails or a chaotic Google Drive for that spreadsheet someone made for you -- you are definitely wasting time and probably looking at outdated reports.  

I use a simple file system where all financial reports are in one folder and all analyses in another. I also use dates in my filenames to ensure that the files show up in chronological order and so it’s easy to identify the most recent version of any file.  

Online dashboards connected to your bookkeeping software are a great way to see the most recent data at a glance. Developing a dashboard for the most important information is a key part of how we can consistently stay up to date on all the companies we work with.

Secondly, accessible numbers are presented in language that resonates with you. 

Now, don’t get me wrong. There is power in learning the correct use of financial terms. But since most business owners won’t ever sit for a financial exam, we avoid jargon and use the Need-to-Know Method to help owners increase their financial knowledge.  

Literally, numbers must be understood to be meaningful. So when you need to understand certain terms or concepts, that is the moment we drill down into the numbers to show you exactly how they work, and what it means to your business.  

#4 Meaningful numbers are actionable.  

Your financial reports, projections, and key performance metrics should be organized to reflect the way you actually think about your business so that they give you the information you need at the moment you need it. 

For example, your books should be structured into categories you use in budgeting like “marketing” and “personnel” so you can quickly see each month how much you are spending in each part of your business AND see if you’re getting the results you need based on where your money is going. 

If your profit and loss statement is presented as an alphabetical list of expense items or a chaotic mess then please, I beg you, get help!  It really shouldn’t be that way. You can get started on more meaningful reports by defining 3 or 4 major categories for your costs and bundling all the expense lines into those categories.  

Ready to Dial-in your numbers? 

If you’re ready for CFO support, Let’s talk! 

But if you want to make headway on your own we have plenty of resources to help there, too. 

Here are my top 3 tips for getting more meaning from your numbers: 

Tip #1: Keep asking questions.

Confusion is information! This is why asking questions is actually a superpower.

If something does seem right in your books, ask about it now. Don’t assume that it doesn’t look right because you don’t understand finances. And definitely don’t wait until next month to see if they magically get better because — they won’t!  And if you don’t understand the response you get, keep asking until it makes sense. 

Tip #2: Define what it means to be on time.

What does “on time” mean in your business?

A really important part of having meaningful numbers is to have numbers that are current and up to date...but what does up to date mean for you?

Here’s the universal standard I highly recommend: By the 15th of the month, your books from the previous month should be closed. This means by July 15th, all of your money stuff from June should be done and reported -- missing items have been tracked down, and the cash is all accounted for.

Whatever works for you in your business — once you set the schedule keep it going! Make it stick.

Tip #3 Get more help with our Meaningful Money Program & Community

Meaningful Money is a combination of two short courses plus an ongoing community of support. Meaningful Money provides CFO support through a mix of 1:1 and group sessions plus online skills building. Learn how to manage your finances, boost profits, and upgrade your financial decisions based on meaningful information.

Check out the details and apply to CFO Advisor so you can build your skills, systems, and knowledge to fuel impact with your company.