Information is more accessible than ever. Communication is nonstop. Amid all the noise, how do you focus on the critical details that will allow you to stay on top of your business?
In keeping with our instant gratification age, a time when decisions need to be made immediately before opportunities slip away or resources are wasted, the flash report is emerging as a key management tool.
Rather than waiting for monthly financials and reports, executives and managers in all industries are creating daily or weekly updates that give them pertinent and timely data. Flash reports can be prepared by each department to help managers and then rolled up into a master report for the CEO.
Industry associations are starting to use these tools to track sector performance, often by tapping a select group of members on a regular basis. Flash reports are also prepared for publicly traded companies or portfolio of investments to highlight financial health indicators and performance.
Flash reports should be at most a page, and it’s even better if you can pare them down to several pieces of information. If they’re longer than that, you’re back in the situation of parsing a report for crucial decision influencers.
They should take no longer than an hour to prepare and hopefully mere minutes, once they are set up. Some users include an area for notes to report events that affected that particular day.
The first step is deciding which pieces of information to include. This will depend on your industry. The overarching function areas flash reports evaluate include revenues, productivity and liquidity. Below are suggestions for common sectors:
- Retail Daily sales, with month, quarter and annual totals; budget comparisons; this day last year; inventory turns year to date/sales per square foot or customer traffic; cash balances; payables outstanding; and if applicable, orders and accounts receivable balances. Posting actual daily sales and target sales by department can be a motivator for employees.
- Construction Leads in month; orders to date; in-progress and pipeline projects by dollar; bids outstanding; percent of future capacity booked; cash balances; line-of-credit balances; accounts receivable and payable.
- Restaurant Daily sales; average daily ticket; number of patrons; labor hours and sales per labor hour; month, quarter and annual totals and budgets; inventory balances; cash balances; accounts payable. You may break sales into food and beverage or meal period to drill down into trends. Posting daily numbers can be a motivator for employees to boost sales in particular areas.
- Lodging Occupancy rates for day, week, month, and year; average daily rate; revenue per room; labor ratios.
- Arts, entertainment and recreation Daily sales; average ticket; patrons; amenity and auxiliary sales; labor hours and sales per labor hour; revenues versus budgets, month, quarter and year; cash balances.
- Manufacturing Orders to date, filled and in pipeline; sales and production volume to date versus forecasts; raw, in-process and finished goods inventory metrics; capacity utilization rate; overtime; accounts receivable and payable; cash and line-of-credit balances.
- Finance insurance and real estate Leads; closed deals; conversion and closing ratios; sales to date versus forecasts; average deal size; cycle time; price per square foot (real estate).
- Professional services Client count, period and year; revenues for month and year-to-date totals versus budgets; revenue per client; realization rate on standard billings; staff capacity utilization; cash balances; accounts receivable and payable.
Your choice of indicators will depend on your particular business, as well as your goals and areas of concern. Perhaps you’re monitoring inventory of critical raw materials. Or overtime has gotten out of hand and you’re trying to improve productivity. Your indicators might signal economic trouble or improvement.
For example, the jump in the number of days houses stayed on the market gave an indication that real estate conditions were worsening as we headed into the recession. The reversal of that has created optimism that the worst is over in that sector.
In addition to measuring performance against budgets and forecasts, prior-year comparisons can be useful. They can help you spot trends in sales, cycle time, productivity and accounts receivable aging.
Posting daily numbers can help your employees stay on track by providing a benchmark to work toward and measure their own performance.