You Are What You Measure Part 2: Analytics In Action

You Are What You Measure Part 2: Analytics In Action

Article credit: Sage 

In Part 1 in this series, I discussed how the limitations of traditional performance metrics might stop your business from reaching its potential. In Part 2, I look at the different types of performance metrics you can use to complement traditional KPIs.

Business owners might feel like they’re always putting out fires. But, with better insight into their operations and processes, there won’t be any fires to fight.

You can do this by complementing traditional financial performance metrics with proactive, indicative, and granular performance metrics. This will show you how you’re tracking against your goals, and what you need to do if you’re off target.

The three main indicative metrics are client retention, cash flow, and working capital.

Client retention

We’re in the age of the customer, which means key performance indicators should include client metrics. Often, these metrics are a good indication of revenue performance and cash flow, so it’s important that you understand client behaviour.

Take client churn as an example. A high churn rate could signal business contraction – and replacing lost customers costs more than just replacing lost revenue. You also need to factor in marketing costs to attract new customers.

Customer satisfaction surveys are useful but, as a traditional metric, the results come in long after the opportunity to resolve a potential issue has passed.

To identify the clients that are at risk of churn and to turn your focus to client retention, consider these steps:

Identify your top tier clients

Analyse your client revenue, client lifetime value, and client profitability, and remember that you’ll get a different value depending on how you group these elements.

For example, clients that generated the most revenue this month may not be the clients with the highest lifetime value. But since they’re regular customers, their loyalty could contribute to factors like brand awareness and year-on-year growth.

Analyse proactive metrics

What percentage of work has not been invoiced for? What percentage of projects are at risk? How many invoices were rejected? These behavioural insights are immensely valuable and can inform your response.

Take action

The clients that are most likely to churn should get most of your attention. Do you need to prioritise a client project to mitigate risk? Do you need to place an order to keep a client on track?

Share this information with your customer service team and come up with an action plan to change how you service these clients and deliver on the experience you promised them.

Adopt the insights throughout your business

To reduce the risk of churn going forward, you might need to make some changes in your business. Perhaps you need to segment clients into groups in your accounting software, for example, by product or industry.

Data-driven insights show you which clients are at risk of leaving. This allows you and your team to focus on nurturing those relationships. You’ll also have insight into which team members are serving these clients, what projects are underway, and where clients are in the client lifecycle, so you can respond to potential issues faster.

Cash flow

Poor cash flow management is one of the biggest causes of failure among small to medium-sized businesses. So, having insights into cash flow is crucial if you want to grow your business.

This means having the ability to predict fluctuations in cash flow in response to shifting dynamics in your business. It means building scenarios around in-progress projects, jobs that you still need to start, opportunities that are closing soon, and more.

When you understand how all this impacts your cash flow, you’ll have better visibility into your business’s financial health. Here are a few steps to getting that insight:

Measure the right things

For example, a high percentage of credit sales might seem profitable, but the cash hasn’t actually come into your business yet, which could impact free cash flow.

To get a sense of cash coming into your business, look at revenue from in-progress jobs and revenue from jobs that you still need to start.

Know your inventory-to-sales ratio. Are you keeping too much stock on hand relative to sales?

Build cash flow scenarios

How can you improve your accounts receivable with upcoming invoices and payment terms? The more historical and trend data you analyse, the better your predictions will be.

Take action

If in-progress jobs are bringing in good revenue, consider prioritising other work. If you have a lot of revenue outstanding, think about renegotiating payment terms with clients. Encourage your sales team to tie up current opportunities before building the prospect pipeline.

Working capital

You can also increase cash flow by improving the efficiency ratios that impact your working capital, which gives an overview of your current situation. Working capital is necessary to help you pay off short-term debt or expenses, but having too much working capital means some of your assets are not being used optimally now or for the long term.

Having a good grasp of your accounts receivable is crucial to monitoring and measuring working capital. How long do clients take to pay, on average? How quickly do your best clients pay versus your slowest-paying ones? Are your invoices segmented by project type?

When your accounts receivable processes are optimised, it’s easier to improve your working capital using automated billing and invoicing, understanding outstanding payments and how to restructure payment terms, and knowing when to request payment in person.

Follow these steps to avoid working capital issues:

Measure the right things

For example, decrease your accounts receivable by improving your collection practices; know how long it takes for an invoice to get paid on average, and know how long it takes to invoice and process payment according to your payment terms.

Identify issues

Implement performance goals for the above metrics, based on appropriate values for your business.

For example, you might not want the ‘average days sales outstanding’ to exceed your average payment terms by more than half. So, if your payment terms are 30 days, and customers pay, on average, within 45 days, this will be within your performance goals.

Identifying trends can also help to prevent issues. For example, you might notice that a certain group of clients are typically late payers. Or clients become late payers after they order a product that has a more complex onboarding process. There might be internal processes that you can improve to avoid this.

Take action

Technology and more efficient processes can improve your accounts receivable, debt collection, and credit management practices. Also, consider renegotiating payment terms to optimise your working capital.

In Part 3 in this series, we’ll look at how you can run a smarter, faster, more connected business.

About Us
Kiteview Technologies (Pty) Ltd was founded in May 2010 to provide the Sage Evolution Business Management solution to the SME market. The management team of Kiteview have combined +30 years of experience in the delivery of small to mid-market Financial & Business Management solutions. This experience, combined with a sound project implementation methodology has helped in Kiteview’s growth, becoming a Platinum status partner for SAGE Pastel within just 1 year.

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You Are What You Measure Part 1: The Problem With Traditional Business Metrics

You Are What You Measure Part 1: The Problem With Traditional Business Metrics

Article credit: Sage 

The finance department is a hub of strategic and operational insight in most businesses. But while they absorb high volumes of data, the outputs tend to be small and periodic, like ‘revenue earned against targets for the third quarter’.

Getting this information periodically, although important for business management, means that, by the time the business responds, it might be too late. It’s like looking in a rear-view mirror and not seeing a pothole in front of you.

To survive the fast-paced, highly competitive business landscape, companies need proactive, indicative business metrics. When combined with traditional metrics, they get complete insight on which to measure performance.

The benefits are proven: According to Aberdeen research, analytics-driven businesses report 86% higher year-on-year increases in operating profit, 32% greater budgeting accuracy, and two-times greater year-on-year growth in operating cash flow.

You can bet that your competitors are diving deep into granular insights to drive their businesses, which leaves you little choice but to catch up.

Businesses need to start using proactive insights to drive their strategy and operations. And the way things are happening in the finance department is not good enough. It needs to take a new insights-driven approach when making decisions, and roll it out to the entire business.

What’s wrong with traditional business metrics?

In the “old days”, finance departments would gather information from every other business department and produce a report at the end of a period (month, quarter, year) that reflected essentials, like sales, profit, and loss.

Today, businesses generate and collect granular data every second. It’s laughable to think that finance can produce a single report based on this data. Some departments use dashboards that let them instantly access and view their data.

But many businesses are still stuck in the ‘periodic report’ mindset and don’t yet understand all the ways their data can really work for them, like having the ability to immediately react to what’s happening in this moment, rather than what happened a month ago.

Data issues

In a Sage survey, 86% of business leaders said a lack of collaboration or communication caused business problems and team failures. To get a complete picture of a client or vendor, they have to speak to at least five people – and no two people were focused on the same thing.

Traditional reports result in a similar disconnect. These are the three biggest issues associated with traditional business metrics:

1. Information is quickly out of date

Information used on the day a report is due is fresh, but with each passing minute, it starts to get stale. If finance first has to get information from different departments before producing that report, it can take days or weeks to interpret the insights and present them in a report or dashboard. By the time executives view this information, it’s already old news.

This forces executives to react to historical information, rather than respond to real-time insights. Decisions are based on guesswork rather than on what’s happening in the moment. The fresher the insights, the better chance business leaders have of making the right decisions.

2. Information is fragmented

Since data comes from different departments, it’s not likely that it will all match up. Sales, for example, might cover the most recent period, but the manufacturing of those products happened before that.

Finance departments are able to turn fragmented data into insights, but there’s also a risk that errors can creep into the reports that executives use to make massive decisions. Information can also be manipulated and biases dictate what information to include in a report and what to leave out. The consequences could be disastrous.

3. Performance metrics are siloed

Every department in a business has a different need for data and different KPIs built around their particular approach, rather than the overall business strategy. This makes it nearly impossible for the business to act as a single unit.

Although the different departments may want to align with the business’s goals, their systems trip them up: finance uses an accounting system, fulfilment uses a warehouse management system, marketing uses a customer relationship management system.

Each system probably has its own spreadsheets, which, to any other department, will be complex to decipher. Sales, for example, can’t respond to manufacturing because it can’t see how much inventory is on hand and how much is being produced. Customer support can’t assist clients if they don’t have access to fulfilment’s ordering system.

Any time departments try to share data, it’s generally done through shared files or printouts discussed in meetings. This is problematic when time is of the essence.

Why you shouldn’t measure traditional metrics alone

KPIs and other traditional-style analytics have limitations. These include:

  • Choosing the right KPIs. KPIs evaluate what’s important, but who decides what those should be? Business school? Your sector? KPIs are essential to running a business but sticking to traditional KPIs means you might miss other insights or approaches to viewing information. The finance department might want to dig deeper into all data within a business using proactive metrics, but a traditional KPI culture makes this difficult.
  • Narrowly focused KPIs. Traditional performance metrics stifle proactivity and might make you overlook performance issues, like precisely predicting cash flow shortages. Traditional KPIs tend to only focus on one area and trying to interpret that data in any other way could introduce dangerous biases. There’s no freedom to explore the data or to analyse it from a different perspective. If sales data is down, for example, there’s no way to know if the issue lies with fulfilment or customers.
  • KPIs can be demotivating. Sales fluctuate for a number of reasons. A competitor discounting a similar product is one example that could lead to reduced sales. When the sales team see these figures without the context, they might be demotivated.

In Part 2 of this series, we’ll look at the different types of performance metrics you can use to complement traditional KPIs.

About Us
Kiteview Technologies (Pty) Ltd was founded in May 2010 to provide the Sage Evolution Business Management solution to the SME market. The management team of Kiteview have combined +30 years of experience in the delivery of small to mid-market Financial & Business Management solutions. This experience, combined with a sound project implementation methodology has helped in Kiteview’s growth, becoming a Platinum status partner for SAGE Pastel within just 1 year.

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Top Trends Shaping Africa’s Small Business Landscape This Decade

Top Trends Shaping Africa’s Small Business Landscape This Decade

Article credit: Sage 

The World Bank has forecast economic growth of 3.6% in sub-Saharan Africa for 2019-20, making Africa home to some of the fastest growing economies in the world. Rapid development, a growing middle class, and business-friendly market reforms are generating welcome opportunities for regional small and medium-sized businesses (SMBs).

Here are some of the emerging trends, and a look at how businesses can benefit:

 

1. The ease of doing business is set to improve

As governments across Africa see the economic growth and job creation potential of the SMB sector, they are making it easier for entrepreneurs to register and operate their companies. According to the World Bank Group’s Doing Business study, both Nigeria and Togo have shown remarkable improvements when it comes to ease of doing business.

A pilot portal, allowing business owners to register a company online in a single day, also recently launched in South Africa.

While many African countries have a long way to go in terms of minimising red tape and upgrading infrastructure, they are certainly taking steps in the right direction.

What business owners can do: Get acquainted with the digital tools available in your area of operation that can help you to streamline processes like business registrations, filing tax submissions, and opening business bank accounts.

 

2. Admin loads are lightened by automated software

Tools that were previously too complex and expensive for smaller businesses are becoming more affordable and accessible. These days, most businesses in Africa have the budget to automate their payroll and accounting with a business software solutions.

Small businesses are even considering advanced tools such as artificial intelligence (AI) to automate processes like:

  • Email marketing
  • Data entry
  • Accounting
  • Customer service

What business owners can do: Look for automated software solutions for manual processes, like making calculations and keeping records. The hours you free up can then be used to focus on sales or billable work.

 

3. Connected customers are information seekers

Modern customers use their mobile phones as portals to knowledge and information. Whether they are researching big-ticket purchases, making inquiries, posting complaints on social media, or providing user reviews on Google platforms, consumers use digital channels to access what they desire from companies of all sizes.

With over 525 million Internet users in Africa – approximately 40% of the population – small businesses cannot afford to ignore this trend.

What business owners can do: Use digital technologies for marketing and customer services. Chatbots can answer customer queries in real time; you can create interesting web content using tools like Piktochart; and you can use a Google My Business Account to create a free online listing, which makes your business searchable.

 

4. Trade to expand

With the Continental Free Trade Area (CFTA) intending to simplify importing and exporting across the continent, Africa is set to experience more intra-Africa trade. Over 40 countries have signed the agreement, and those not yet part of it are still likely to join. This could aid continent-wide economic growth while reducing costs as we start to use products from neighbouring countries as opposed to ones from other continents.

What business owners can do: Consider the opportunities of cross-border trade and how it will affect your supply chain. Look to build relationships with suppliers and customers in other countries, and contact their chambers of commerce and international trade departments to take advantage of any opportunities they might present.

 

5. Fourth Industrial Revolution – why the hype?

There has been much hype around the “Fourth Industrial Revolution”, also known as “Industry 4.0” or “4IR”. This industrial revolution is driven by connected devices and sensors, known as the Internet of Things (IoT), advanced robotics, intelligent software, AI, virtual and augmented reality, 5G, 3D printing, and a host of other technologies.  

While some African cities still face challenges with reliable electricity supply or fibre access, technologies are becoming more and more affordable and accessible to small businesses, allowing them to compete effectively with larger companies. Knowing when to come on board is where the trick lies – not too soon for your customers, but not so late as to miss the wave.

What business owners can do: Investigate how small businesses in Africa are using technology. What kind of opportunities could AI and business solutions offer you? Could robots enable new manufacturing options for your company? And most importantly, what effect could this have on your customers and workforce?

Leading Africa’s growth

Small and medium-sized businesses in sub-Saharan Africa are known to be resilient, making this time of fluctuating economic and social trends, changing consumer behavior, and evolving technology burst with opportunity for your small business.

With Africa on the rise, it’s a great time to be an entrepreneur.

About Us
Kiteview Technologies (Pty) Ltd was founded in May 2010 to provide the Sage Evolution Business Management solution to the SME market. The management team of Kiteview have combined +30 years of experience in the delivery of small to mid-market Financial & Business Management solutions. This experience, combined with a sound project implementation methodology has helped in Kiteview’s growth, becoming a Platinum status partner for SAGE Pastel within just 1 year.

Contact Us

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Control Has No Parent Window – Message on AP Or AR Enquiries

Control Has No Parent Window – Message on AP Or AR Enquiries

Article credit: Sage 

The following error may appear when opening the AR or AP Enquiry screen:

SOLUTION:

Delete the relevant agent registry key on the local PC where the above is a problem, as follow:
a) Completely close Evolution on the specific PC where this problem occurs on;
b) Open the PC’s Registry by going to Start | Run (or the text field just on top of the Start button),
insert the text: regedit and Enter on the keyboard;

For a Windows 8 PC, on the desktop of the PC, select the Windows key on the keyboard together with R on the keyboard to open the screen below, enter regedit below and enter on the keyboard to open the Registry Editor

c) In the Registry Editor, go to:
• For AR Enquiries screen:
HKEY_CURRENT_USER\Software\Softline\Evolution\Agents\*XXX*\ TfrmAREnquiries
• For AP Enquiries screen:
HKEY_CURRENT_USER\Software\Softline\Evolution\Agents\*XXX*\ TfrmAPEnquiries
d) Right click on the TfrmAREnquiries / TfrmAPEnquiries folder and then delete it
e) Repeat the same step on any other folder with a very similar name e.g. TfrmAPEnquiries002
f) Log back into the company with that same agent on the same PC and test if the query has now
been resolved.
g) If not, close Evolution again on the local PC and delete the complete agent in the local PC’s
Registry e.g. HKEY_CURRENT_USER\Software\Softline\Evolution\Agents\*XXX*
h) Again Log back into the company with that same agent on the same PC and test if the query has
now been resolved.
*XXX* above depends on the specific relevant agent name that encounters the problem on
that specific PC.

Disclaimer: These articles refer to possible solutions and a platform to share information. Each article describes a method that solved a query (knowledge gathered from previous sites) and how Sage Evolution should operate. These articles make reference to a specific Sage Evolution version, however the thought process can be generalised. Please note the information contained in these articles should be treated as guidelines and adapted to accommodate differences in business processes and IT environments. Articles may not be applicable to all environments. If this article did not resolve your query please contact Kiteview Technologies Support Department on:  (+27) 010 005 6678.

About Us
Kiteview Technologies (Pty) Ltd was founded in May 2010 to provide the Sage Evolution Business Management solution to the SME market. The management team of Kiteview have combined +30 years of experience in the delivery of small to mid-market Financial & Business Management solutions. This experience, combined with a sound project implementation methodology has helped in Kiteview’s growth, becoming a Platinum status partner for SAGE Pastel within just 1 year.

Contact Us

For An Obligation Free Quote

7 Reasons Why Sage 200 Evolution CRM Is The Ideal Choice

7 Reasons Why Sage 200 Evolution CRM Is The Ideal Choice

Article credit: Sage 

Sage 200 Evolution’s CRM is meeting the needs of over 15,000 companies around the world by being affordable, easy to use and adaptable. Using Sage 200 Evolution’s CRM our customers save time, increase productivity and gain greater visibility across the business for actionable decision making. Whether you’re just starting out or have grown to several hundred employees, Sage CRM can help accelerate your business success.

1. Intuitive CRM your teams will want to use

At Sage, we believe modern software shouldn’t be difficult to learn, hard to update or challenging to use. This is the approach we took when we created Sage CRM. It’s an intuitive CRM solution for growing companies, and one which you and your team can get started with and experience within minutes. And because Sage CRM offers a cloud-based solution, you don’t need to worry about patches or updates; it all happens automatically.

2. Give your teams the tools they need to succeed

Sage CRM supports your business by giving your staff, whether they work in sales, marketing, or customer service, a tool that can help them get their job done quickly and efficiently. Your sales team can sell proactively, identifying cross-sell and up-sell opportunities, progressing opportunities from lead to close. Your customer service team can manage customer cases effectively, while your marketing team can easily manage their campaigns and generate a quicker return on investment.

3. Sell smarter and accelerate sales team performance

Your sales team drives the growth of your business, and they need to know they are working on the right leads at the right time. Using Sage CRM, you and your teams can review the stages of various sales deals, shorten the length of sales cycles and increase revenue opportunities. With access to a wealth of information about their sales pipeline, key opportunities and account activity, your salespeople are equipped to sell smarter and more efficiently, accelerating your sales performance.

4. Gain valuable business insight

As the owner or manager of a successful business, you depend on up-to-date information and analysis about your sales, marketing and customer services activities and performance. Sage CRM supports management with access to important information about their business KPIs in real-time so you can see how your business is performing and take corrective action when needed.

5. Work anywhere, anytime with mobile CRM

Modern business takes place inside and outside the office and beyond the nine to five. Using mobile CRM, you can access up-to-date customer information and prepare for important meetings while on the road. Salespeople can easily manage sales activities and follow-up actions and identify sales issues in real-time on any mobile device. And, your customer service team can act on key customer information while on-site visits.

6. Collaborate effectively across teams

Employees shouldn’t have to spend time updating various databases, stitching together information systems and ensuring their files are up to date. With Sage CRM, you and your team can collaborate on and share up to date business information and put processes in place that help everyone become more productive and efficient.

7. Adapt Sage CRM to suit the needs of your business

Sage CRM is a highly flexible and adaptable solution designed to meet the needs of your business today and adapt to your business as you grow. Sage CRM
is an ideal solution for companies looking to manage multiple areas of their business. Using Sage CRM you can plan events, oversee business projects, track competitors and more. With Sage CRM you can easily establish standard workflows around key business processes and base follow-up activities on your unique business needs. This way, you can ensure your business is running as efficiently and effectively as possible. The adaptability of Sage CRM helps ensure you get the most from your CRM investment.

About Us
Kiteview Technologies (Pty) Ltd was founded in May 2010 to provide the Sage Evolution Business Management solution to the SME market. The management team of Kiteview have combined +30 years of experience in the delivery of small to mid-market Financial & Business Management solutions. This experience, combined with a sound project implementation methodology has helped in Kiteview’s growth, becoming a Platinum status partner for SAGE Pastel within just 1 year.

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