Take it to the board – quality strategy only comes with stronger reporting
This is a copy of the article first published in The Recruiter Magazine (July 2017) Page 16
“In my opinion Recruitment Businesses need better reporting to help with strategic business decisions”
Too often, the way recruitment businesses report data evolves over time. This makes it difficult for business owners and directors to be furnished with detailed, real-time management information that can be used as the basis for successful decision making.
Recruitment companies who are either unclear about business reporting or who simply do not have it, end up relying on disparate silos of information which are then used in short term tactical ways. All of this masquerades as strategy. But this is not strategic in any sense.
Consequently, many recruitment businesses end up with numerous and unchecked data sources and poor-quality data generated reports. With inferior data, decision making is inconsistent and has the ability to:
• Delay revenue recognition and cash flow
• Incur fines for noncompliance
• Instil operational inefficiency
• Erode customer confidence
• Increase subscription costs to reporting software
• Negatively affect billings
Often the aim of a business is to reduce the cost of the finance function or provision. The reality is that the potential for cost savings is limited and instead the focus needs to be shifted to how the finance function can become a strategic business partner, adding value. It is essential to fully understand how the finance function should influence strategic decision-making. Yet in many recruitment companies this is not the case. This puts at risk, not just the future growth and prosperity of the business, but also its very survival.
If a business wants to provide timely, accurate, and consistent information to be used for strategic decision making, then quality board packs are an important first step. Performance reporting is a means to an end, and never an end in itself. The board report is therefore the document that pulls together all the relevant information with balance and objectivity. No matter what your size, the information is vital to your continuing success. The purpose of management information should be to promote action. So how can the finance function start to begin adding this value through the board pack?
Board packs are the single most crucial source of information for directors. They supply the numbers and intelligence necessary to ensure that the dialogue and decisions at board meetings and within he day-to-day management of a recruitment business are as productive and effective as possible. Even if you are a one or two person organisation they are vital. The board report needs to draw together and integrate management information alongside financial analysis to deliver something meaningful and tangible. This allows you to make the decisions necessary to grow your business.
It sounds simple, but getting this right is fraught with pitfalls. A good board report has to be technically strong. But this is only part of the story: Board directors also need to take a pro-active approach and work with their finance function. The finance function must therefore exercise integrity and transparency in the creation of the report, but they must also be influential enough to ensure that the pertinent points are discussed and are able to aid strategic decision making.
Only with stronger reporting can better quality strategic decisions be made.
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