How To Make Better Business Decisions with a Reporting Pyramid

In order for you to be able to make informed decisions and remain competitive in your business, you need to be accessing real time data and insights. Having a strong reporting framework is more important than ever. A reporting framework will enable you to capture all the data on a regular basis that is important to your business and keep you on track with your strategic goals. 

In this blog post, we will explore the importance of having a strong reporting framework and how Nine Advisory uses reporting pyramids with our clients to break down reporting into daily, weekly, fortnightly, monthly, quarterly, and annual reporting.

Why is having a strong reporting framework important?

A strong reporting framework is important for several reasons. 

Firstly, it provides you with the data you need to make informed decisions. Without a strong reporting framework, you are operating in the dark and are not able to see the bigger picture or the detail about what’s happening across your business. 

Secondly, a strong reporting framework helps you to identify trends and patterns in the data. By analysing data over time, you can identify areas where the business is performing well and areas that need improvement. 

Thirdly, a strong reporting framework helps your business monitor performance against key performance indicators (KPIs). This allows you to identify areas where the business might be falling behind and take action to address the issues. 

Most importantly, the framework is forward looking, in real-time and saves you money BEFORE mistakes or opportunities are left too long and become increasingly costly. If we can identify that your wages % is 2% too high in the first week of the month, we don’t have to wait until the 2nd week of the next month (4 weeks of mistakes later) when we meet to realise that this has happened.

How Nine Advisory uses the reporting pyramid

At Nine Advisory, we use a reporting pyramid to break down reporting into a series of frequencies. Below is an example of our framework.

The reporting pyramid consists of six reporting frequencies: daily, weekly, fortnightly, monthly, quarterly, and annual.

• Daily reporting
  Daily reporting is used to monitor performance on a day-to-day basis. Examples of data that could be looked at for daily reporting include revenue or sales, daily margins, revenue per head or per customer, and customer satisfaction ratings.

• Weekly reporting

  Weekly reporting is used to monitor performance on a weekly basis. Examples of data that could be looked at for weekly reporting include wages as a percentage of sales, cost of goods sold as a percentage of sales, and employee turnover rates.

• Fortnightly reporting

  Fortnightly reporting is used to monitor performance every two weeks. Examples of data that could be looked at for fortnightly reporting include supplier performance ratings, inventory turnover rates, and website traffic.

• Monthly reporting

  Monthly reporting is used to monitor performance on a monthly basis. Examples of data that could be looked at for monthly reporting include cash flow forecasts, sales pipeline reports, and customer retention rates.

• Quarterly reporting

  Quarterly reporting is used to monitor performance on a quarterly basis. Examples of data that could be looked at for quarterly reporting include profit and loss statements, balance sheets, and cash flow statements.

• Annual reporting

  Annual reporting is used to monitor performance on an annual basis. Examples of data that could be looked at for annual reporting include financial statements, audit reports, and performance appraisals.

How You Can Action This in Your Small Business 

Implementing a reporting framework in your small business can seem daunting, but it doesn't have to be. The first step is to identify the key data points that are important to your business. These will vary depending on the nature of your business, but could include things like sales, revenue, customer satisfaction ratings, and employee turnover rates.

Once you have identified the key data points, you can start to build a reporting framework around them. This could involve setting up spreadsheets or dashboards to track the data and create visual representations of it. Decide how often you would like to report on each metric using the example framework above. 

The key to implementing a reporting framework successfully is to make it as simple and easy to use as possible. This could involve automating data collection and analysis wherever possible, or providing training to staff to implement the rhythm of reporting. 

Examples for Reporting 

Below are some other types of data points that might be relevant to your business. 

Daily Reports:

• Number of calls made by sales representatives

• Customer service call volume and response time

• Website traffic and user engagement metrics

• Inventory levels and stock replenishment needs

• Production outputs and manufacturing cycle times

Weekly Reports:

• Sales by product or service category

• Marketing campaign performance and return on investment (ROI)

• Accounts payable and receivable aging reports

• Employee time and attendance

• Customer feedback and complaints

• Fortnightly Reports:

• Social media engagement metrics and performance

• Supplier performance ratings and delivery times

• Operational efficiency metrics such as lead times and quality metrics

• Equipment maintenance schedules and updates

Monthly Reports:

• Profit and loss statements and cash flow statements

• Budget versus actual performance analysis

• Customer retention and churn rates

• Sales pipeline reports and conversion rates

• Employee performance reviews and goal tracking

Quarterly Reports:

• Balance sheets and income statements

• Sales by customer or market segment

• Market share and competitive analysis

• Business plan progress and updates

• Employee satisfaction and engagement surveys

Annual Reports:

• Financial statements and audit reports

• Regulatory compliance reports

• Stakeholder updates and progress reports

• Capital expenditure plans and investment strategies

• Environmental and social responsibility reporting

It's important to note that the specific reports that you choose to implement will depend on your industry, size, and unique needs.

This reporting pyramid is a framework we use for all our clients. If you are interested in finding out how Nine Advisory can help you to create Success on Purpose, please contact us.