This really is NOT a nostalgia piece about "back in the old
days", but…
In the mid-eighties when I first started consulting/programming,
I noticed right away that most of the people who were hiring me
were the CFOs and accountants of their companies. Most of the
training I provided and programs I wrote related to accounting and
finance systems. (That's not too much different from today
except that now I actively pursue that type of work.)
When I returned to business school to get my accounting degree,
one thing really struck me about the majority of projects I've done
for small businesses: they are concerned mostly with looking back,
not looking forward. Maybe this is because when most
people think about accounting they picture adding up where the
money came from and where it all went and counting what's left
over. I've developed plenty of systems in which reporting on
past financial performance was a key component.
My point is this: most small businesses operators do nothing
more with their financial information than use it to report on past
performance - always to the IRS and sometimes to themselves.
Reporting on "the old days" is important (a requirement, really)
but we cannot change those old days - they're done. The "new
days", the upcoming quarters and fiscal years, are the only thing
businesses have any control over.
Rarely do I encounter small businesses that prepare any sort of
financial projections and forecasts and the ones that do tend to be
more successful than the ones that don't. But the most ironic
thing is that systems for reporting past performance are likely to
be more complex and expensive than those for preparing forecasts
and projections.
Go figure.