If you think that to stay in control, every piece of information generated by the business must cross your desk, you'll ultimately become swamped by reports, memos and computer printouts to the point where they are no longer manageable.
A better way is to set up a monitoring system that allows you to track only the information you need to stay in control on a regular, but not constant, basis. Set up a schedule of when you need what. Resist the temptation to delve too deeply beyond the reports you get. Rule of thumb: The more detail you devour, the less return on invested time you get.
For example, weekly or daily reports on all Accounts Receivable can pile up quickly. Instead, an Aging Schedule once a month can alert matters to your attention.
Select the frequency (daily, weekly or monthly) that is appropriate for each report. With competent and trustworthy staff you can receive verbal reports on the indicators and variances you feel important to monitor.
Some of the items worthy of review could be: total sales, sales by product group, sales by territory, average sales prices of major products, gross profit margin on total sales, gross profit per product, production costs, direct expenses, other income and expenses, net profit, cash flow, accounts receivable, inventory, R & D status and expenses.
I once heard of a small company that had a unique system for having profitable days leading to profitable years. They had a system of indicators that, at 10:00 a.m., predicted the profitability for the remainder of the day. Whenever certain conditions predicted an unprofitable trend, bells rang throughout the building and salespeople on the road were contacted. Routines outlined certain activities to be decreased and others to be increased until the "all clear" was sounded.
I never knew exactly what the corrective measures were because it was a guarded secret. I once heard the manager speak of applying the 80/20 rules to customers where 80% of profitable sales came from 20% of his customer base.
We don't need to know the details of that company's routine – it's the concept we need to apply.
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