Understanding your business and using the data to make effective, strategic decisions is vital to the success of your business. And with the help of your accountant and accounting software, you should be able to identify and measure your key areas on a regular basis.
The trouble most business owners have with setting business targets is that many businesses don’t know what to measure. The result: bad management, mixed messages, confusion and focus given to the wrong thing.
Use benchmarking to improve your business
Benchmarking involves measuring the performance of your business against a set of standards or a competitor in the same market. Comparing your business to others is a valuable way of improving your understanding of your business performance and potential.
Once you have implemented changes, you should benchmark your business again to see the results. This will tell you what is working, and where you can still improve.
542 Tip: If you are considering buying a business, benchmarking is an essential resource. Benchmarking can help you to measure the past performance of a business to see how it performed against industry averages.
Learn from benchmarking data
One of the great things about benchmarks is that they give businesses owners’ peace of mind. Your accountant has access to great tools that will benchmark your business against thousands of other businesses, with specialist benchmark reporting available from independent providers as well as the ATO.
This can be useful, not only as a performance measurement mechanism but for assessing the ATO risk for your business based on key metrics. For example, if your business is inside the benchmark range for your industry and the ATO hasn’t received any extra information that may cause concern, you can be confident that the ATO won’t be giving you a call come tax time. Now, that’s peace of mind!
Regardless of where you are on your business journey, your accountants’ expertise should not be limited to tax compliance. Not only should your accountant be proactive about saving you money, they should also be committed to helping you achieve your business objectives.
542 Partners can provide benchmarking solutions for all industries. Is it time your business had a health check? Talk to us to arrange a consultation.
Or check out our website for more information.
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