Imagine, for a moment, an aircraft pilot. Much of the time, they rely on the information relayed to them by their instruments in the cockpit or the picture they can see through the cockpit window. They use the information presented to them, both outside and inside, to make decisions about their flight.
A business owner or manager is no different. They are constantly receiving information from a variety of sources, and making decisions based on this information. Much like a pilot flying a plane, they have a destination in mind and will use this information to ensure they get there, no matter the ‘weather’ or ‘traffic’.
A pilot can, in theory, fly a plane without any instruments. But the flight will be extremely limited. Their view of the traffic around them is limited to what they can see with the naked eye. They can’t forecast incoming weather, only see what is on the immediate horizon. And, in poor weather, they just can’t fly at all.
Again, business is no different. Running a business ‘outside the cockpit’ is fine if things are going well. But your view is limited to what you can see and, when the “weather” turns, you are at a very high risk of crashing.
Amazingly, this is how many business owners operate. This isn’t because they choose to, but because the data they have access to – the instruments – are poor quality and slow. Imagine flying a plane with an altimeter that told you the height ten minutes ago. By the time you worked out you were at ground level, you’re ten minutes into the ground. Now imagine it was a month behind, and you are imagining the very situation most small business owners face every day.
Older accounting systems rely on manual entry of data, so they are as only up to date as the data they receive. Of course, attending to your books every day is an onerous exercise, so daily data is out of the question. Weekly, maybe, for the most diligent. But much more likely is monthly. Monthly data in arrears.
There is a better way. Cloud accounting data is, in many ways, live. You can connect together your sales systems and accounting systems to record sales in real time. You can setup live bank feeds to keep your accounts reconciled with your bank in real time. In other words, you can fly with instruments.