Why drown yourself in data?

Why drown yourself in data?

Do you understand the difference between ‘need to know’ and ‘nice to know’?

Many businesses don’t when it comes to gathering data for job costing and revenue recognition, according to Trish Hall, CEO of Melbourne-based Greentree Partner, Star Business Solutions.

If your business is project-based, it’s driven by accurate data. But too often, businesses run the risk of slowing themselves down – and costing themselves money – by wanting to know too much. Someone has to gather that information, and everyone involved in a project has to supply it.

Trish says businesses should think more about sparing their staff the pain of gathering unnecessary data. “I have yet to find a person who loves to enter timesheets recording the time spent against their projects,” she says.

“Make sure that the data collected is worth the pain of collecting it. If the data is not going to be used for analysis, invoicing and customer reporting now or in the foreseeable future, don’t collect it.”

THE CFO’S NIGHTMARE

Picture this: You’ve got a major project underway, but your accountant and your project manager are at loggerheads. They both want information, and they’re either not getting it, or each is insisting that their particular data set is more important. Accurate job costing and the tracking of income and expenditure are both vital to the completion of the project, and to your company’s profitability, but in seeking to satisfy them, too much data has been collected – and neither is satisfied with what they’ve got.

For example, accountants will want to ensure that invoices going out to the customers have the detail required to get them paid, that work in progress is correctly accounted for, and that revenue recognition calculations can be done easily. On the other hand, the project managers want to know how much has been spent doing particular activities on a project (or across multiple projects), and how this can be applied to ongoing new projects or prospective projects. They will also want to be able to provide relevant information to their customers and analyse actual versus budget. That’s where you tend to get the conflict, and whoever has the strongest views (or the loudest voice) tends to win.

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