Readers of my blog will know I have been caught out before, thinking of food when Jonathan has been talking to clients. So, this time I listened very carefully before getting excited at the thought of food in the form of donuts. So, Where’s The Food (!) as donuts may be the new way to look at financial information?
The best donuts are those fried before your eyes!
So why was Jonathan talking about donuts when a client asked about the benefits of up to date financial information?
“Well,” said Jonathan, “it’s like this. The best donuts are the ones you buy at fairgrounds; the ones that are made right in front of you, falling into the sugar bath and then delivered straight from being cooked into your hands in a paper cone, for you to eat while they are still warm.”
Now, I know donuts are donuts and, if I can eat them hot, warm or cold, it matters not to me as they still get eaten in short order, so I am a little unsure as to why this mattered to Jonathan. Perhaps I am a little greedy?
“The next best donuts,” he continued, “are the ones you buy from the shop the day they are made. Still good, but not as good as the ones you buy at the fairground and eat straight away.”
The most useful financial information is still warm
I was still puzzled as to where this was going, as I could not see the link between donuts which you can eat and financial statements which you can eat, but would not taste that great (cat food anyone?).
“Finally,” Jonathan said, “the worst donuts are the day old donuts; stale and a bit chewy rather that melt in the mouth like fairground ones do; and are perhaps best put in the bin.”
Jonathan must have got this bit right as the client agreed with him that fairground donuts were the best, but they, like me, could not see why Jonathan was rambling on about donuts when the question was about financial information.
“Well,” said Jonathan (in that tone of voice that I know means that all will be revealed in a way that even a dozy cat could understand), “it’s like this: the most useful financial information is like the fairground donuts; it is most useful when it is still warm so, for example, monthly management accounts will give you useful information about what happened last month (while still fresh in your mind) and enables you to make strategic decisions on a timely basis and with accurate information.
"Information provided quarterly can be considered to be like shop bought donuts; OK to use but not as useful in making timely decisions and you may have forgotten important events that happened at the start of the three month period.”
I know this bit is true, as Jonathan has to continually remind me that I have just been fed and he is not going to fall for my hang dog expression.
Why you should opt for regular management accounting
“So,” said the client, “I think you are going to tell me that waiting for the annual accounts to be prepared before getting any information on my business’ finances is like the day old donuts; stale and of no use to anyone, apart from keeping HMRC ('His Majesty’s Rapacious Cats') happy?”
“Exactly.” said Jonathan. “By using Xero and Syft and having us involved on a regular basis is effectively going to give you a constant supply of fresh donuts. But, also remember that another reason fairground donuts taste the best is the background noise of the funfair in your ears. Which in the case of the monthly management accounts is the commentary and advice we can give you.”
My good friends at Xero and Syft may not totally approve of their award winning software being likened to fairground donuts, but I guess that is a lot better than being thought of as old, stale and not fit for consumption by business owners.
Want to know more?
If you would like to know how Rowdens can provide you with fresh and useful management information every month, please do get in touch with us and arrange a visit. I suspect that shop bought donuts may be on offer, or you could arrange a meeting at a local fairground to get the best of both worlds!