The Perils of Serving Two Masters

Posted by on Oct 26, 2017 in Lessons from the Big End of Town, Using Information as a source of Competitive Advantage

The truth is in the cash flow

The Perils of Serving Two Masters

This is the second article I wrote on Murray Goulburn, on behalf of the Association of Virtual CFOs and published by Smart Company.

The background to this piece was an announcement of a full year profit for FY16 by Murray Goulburn.

At face value, this was a most unexpected outcome.

Remember, this was a business under so much pressure that it had slashed payments to its suppliers just a few month earlier.

Intrigued, I took a closer look at the Murray Goulburn result. The “devil in the detail” revealed some interesting pieces of “accounting magic”.

The main lesson for owners of small and medium size businesses is that your financial information is a source of competitive advantage.

When used properly, and with the right degree of granularity, your financials will tell you:

  1. Which aspects of your business are performing well.
  2. Which aspects are performing below expectations.
  3. Where to focus your attention to improve profitability and cash flow.
  4. The order in which to apply that focus.

If you’re not using your financial information to make informed decisions, or if you don’t know how to use your information in this manner, then please Contact Us.

We can help you.

The Perils of Serving Two Masters