Financial reporting is often thought of as the ongoing retrospective, month-end look back at purely operational financial performance – often solely sourced from your Finance or ERP system.  In reality, there are 3 different layers of financial data that should be looked at in order to get a complete and insightful view of finance throughout your business.

1. Let’s start with the obvious.  There is and will always be a need for an end-of-month view of costs, based on your cost centres and chart of account hierarchies (operations, customer services etc.).  But this alone only gives you a historic view of departmental costs.  The key issue here is that your business performance is rarely tracked solely this way, as many processes span across different business units.

2. Cross-functional business processes tend to follow the natural flow of a business activity as it meanders its way across different teams in your organisation.  For example, a customer query based on a recent order may end up being passed between several different teams (customer experience, refund management, logistics, warehousing etc).  Therefore, it is essential to understand the cross-functional financial impact of business processes, as well as each cost-centre based team or function.  This will give you a good view of internal organisational activity. 

But what about those who you actually do business with?

3. Your customers / patients / passengers / members have no understanding or knowledge of the internal workings of your business, and nor should they.  They simply buy your products or services – via your website, visiting your stores or by calling you. They may complain, compliment, upgrade or cancel their relationship with you, and they may engage with you – by responding to emails (or deleting them), and following you on social media (or blocking you).  Although this may seem like an eclectic list of customer-facing business actions, they are all valid and they all generate some form of cost for your organisation – which will relate to at least one of your business processes and potentially multiple teams.

To have true enterprise-wide financial insight across your business, you need to consider how to both obtain and align data from each of these three layers:

  • how your customers are using your products/services, 
  • how this is impacting your business processes, and 
  • what it means in terms of activity and costs of a per-team / cost centre level.  

This will unlock an active understanding of the reciprocal impact of what you do for your customers, and how this affects what they actually do and vice versa.  Something that is popular, happens frequently or is done well isn’t necessarily profitable.  You should strive to understand and balance your 3 data ledgers in order to achieve true financial insight, which can be used alongside operational insight to drive profitable business outcomes.






Dave Sheppard

Dave Sheppard

Data and insight Lead

Dave is a seasoned practitioner in building innovative BI strategies for data-driven, value-adding business insight. He is a veteran in architecting, planning & managing the delivery of BI, data & analytical solutions, to client requirements, either on-premise or via cloud technologies. 

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