As they occur, you can visualize cash pouring out of a bucket through lots of various-sized holes. You can also imagine cash flowing over the top because the bucket has not grown fast enough. That is not to say your accountants are wrong; the concept of generally accepted accounting principles is sound and needed.
However, here’s where accounting fails us: Your financial statements can be correct, yet you still have an uncertain future. No financial statement will show all the places where a business is leaking. So, where would one go to examine and understand one’s Leaky Bucket?
Here are a couple of general areas the bucket can leak and how an effective ERP can help you track them:
Minimized training investments with employees cause unnecessary problems within your organization and cost both time and money. Counterproductive dramas suck leaders’ and mid-managers’ time and attention away from being strategic, interfacing with customers and other key stakeholders, and having more productive interactions with their team. Modern Technology includes tools which will improve data transparency and access to cause less counterproductive dramas.
“If you don’t know where you are going, any road will take you there.” Consider whether your company is growing at an acceptably high level, whether this growth rate is predictable, and if you count on it for the next several years. Does cash flow support this plan?
Turn revenue into profit and cash by being efficient with your processes, time and resources. Avoid ineffectively communicating your goals and expectations or emphasizing the wrong priorities and not getting the teams on board. Create a culture of accountability. A modern ERP platform of today will support everyone working in one place regardless of physical location “remote”, in a secure manner, with collaboration tools to monitor and measure the expected productivity uplifts.
How can you accurately identify your leaks and work toward patching the places where your profits are not fully being captured? A start is to employ appropriate technology to accurately track product information from planning product development, materials sourcing, production process optimization and control through inbound logistics product forecasting. A modern ERP can help the “leaks” reveal themselves and offer solutions. Strong planning and solid monitoring of all systems and processes can instantly generate additional revenue.