Most startups begin with relatively simple ways of managing information. An Excel spreadsheet or Google Sheet might track customers, revenue, expenses and the occasional marketing campaign. It isn’t particularly sophisticated, but it works because the business is small enough for someone to understand what’s happening.
As the business grows, more software usually follows. A CRM such as HubSpot helps manage customer relationships, Xero handles accounting, Stripe or PayPal processes payments, and marketing platforms provide information about campaigns and website activity.
Eventually, reporting tools such as Power BI or Looker might be introduced, while automation platforms like Zapier help move information between systems.
Each purchase may have been perfectly sensible at the time. The difficulty comes when the business needs to understand how everything fits together.
You can have excellent software in every department and still struggle to answer a straightforward question about business performance.
When Business Information Becomes Disconnected
Different systems are designed to perform different jobs, so it’s perfectly normal for information to be spread across several platforms. Your accounting software records financial transactions, your CRM tracks customer relationships and sales activity, marketing platforms report on campaigns, while payment providers record money moving through their systems.
Problems arise when the business expects those systems to provide a consistent picture without establishing how the information relates.
For example, a CRM might report that £20,000 of deals were closed during a month, while the accounting system shows £16,000 in invoices and the bank account shows £12,000 received.
Those figures aren’t necessarily contradictory, hey may simply represent different stages of the same commercial activity. But if nobody understands the differences, people can start questioning which report is correct.
The same issue appears when employees use different definitions, records aren’t updated consistently or information is copied between spreadsheets without clear ownership. Over time, the business can accumulate plenty of information while becoming less confident about what it’s telling them.
Why Another Dashboard Won’t Necessarily Solve the Problem
When reporting becomes difficult, introducing a new dashboard can seem like an obvious solution. Power BI, Looker and similar tools can be extremely useful. They can combine information from different sources, highlight trends and make performance easier to monitor. However, they still depend on the quality and consistency of the information being supplied. If one system counts a customer when they submit an enquiry and another counts them only after their first purchase, a dashboard won’t automatically resolve that difference.
Similarly, automation tools can transfer records between platforms, but they need instructions about what information to move, when to move it and how it should be handled. Without those decisions, automation can simply move inconsistent information around more efficiently. The problem isn’t that the software is inadequate. It’s that the business hasn’t yet established how its information should work together.
What Happens When the Numbers Don’t Agree?
Imagine you’re trying to understand whether your marketing is generating profitable customers. Your advertising platform reports campaign expenditure and enquiries, your CRM records sales conversations and completed deals, your accounting system records invoices, while another system may contain the costs of delivering the work.
Each platform holds part of the answer and to understand the return on your marketing investment, you need to establish how those records relate, which costs should be included and what period you’re measuring. Without that connection, you might increase spending on a campaign that generates plenty of enquiries but relatively little profitable business. Or you might stop a campaign that’s attracting fewer customers but producing much more valuable work. This is where disconnected information becomes a commercial problem rather than simply an inconvenience for whoever prepares the reports.
Start With the Questions Your Business Needs Answered
Before buying another reporting platform or attempting to connect every system, consider which decisions you’re trying to make. You might want to understand where revenue comes from, why profitability is changing or which customers are most valuable.
Once those questions are established, you can identify the information needed to answer them and where that information currently exists and you may discover that your existing software already provides most of what you need. The missing element could be a consistent definition, a reliable way of combining records or a change to how information is collected. A useful starting point is to ask:
- Which business decisions are currently difficult to make?
- What information would help us make them?
- Where is that information recorded?
- Do different systems measure the same things consistently?
- Who is responsible for keeping the information accurate?
- What needs to change before we invest in additional tools?
Making Better Use of the Tools You Already Have
A business doesn’t necessarily need to replace its existing systems to improve reporting. Excel and Google Sheets can remain perfectly suitable for some activities. HubSpot can continue managing customer relationships, while Xero handles accounting and financial records. The important thing is understanding what each system is responsible for and how its information will be used.
For example, you might decide that your CRM is the main record of sales opportunities, while your accounting system is the authoritative source for invoicing and payments. Those systems can then contribute to reports that answer specific business questions, without requiring every piece of information to be copied into one enormous database.
As requirements become more complex, automation, integration and reporting platforms may become worthwhile investments. But those decisions are easier to make when you understand the processes and information they need to support.
Building a Data Setup That Grows With Your Business
A small startup might initially need a monthly report combining sales, expenses and customer activity. Later, it may need more detailed information about profitability, customer retention, forecasting or operational performance.
There’s no advantage in building an elaborate reporting environment before you need one. Equally, ignoring how information is collected and organised can make future improvements unnecessarily expensive. A proportionate approach allows you to improve things gradually.
Start with the current business questions, establish reliable information and introduce additional capabilities when there’s a reason to do so. That might mean improving an existing spreadsheet, connecting two systems or introducing a reporting platform. The appropriate solution depends on the requirement, not the number of tools available.
Better Decisions Start With Better Information
Having more technology doesn’t automatically give a business a better understanding of its performance. You can have a sophisticated collection of applications, integrations and dashboards while still struggling to explain where profits are coming from or why customers are leaving. Equally, a business with relatively simple systems can make excellent decisions when its information is reliable, relevant and understood.
The objective is to make the information you already collect more useful, then invest in additional technology where it delivers a worthwhile improvement. If your business has accumulated spreadsheets, software and reports that don’t quite agree, WiseWhale can help you understand what’s happening and identify practical improvements.
Further reading
Explore how to review your existing business systems, identify requirements and plan technology changes around the needs of your business.