Remember the conference last year where you scored two big clients? How about the business trip that energized a flailing account? According to a study released by Stanford Professor Philip Zimbardo and MagnifyMoney’s Nick Clements, those memories could be the key to your organization’s financial health. That’s because looking back gives us the ability to recognize patterns and glean information we can use to make better choices in the future.
But where do those memories exist? In the business world, they’re often contained in finance data, those eye-opening accounts that provide far more than just numbers. So what should you look for in past expense records, and how can it help your future growth? Let’s take a closer look.
Take a trip down memory lane – and bring a pencil
Just looking back itself isn’t enough. It’s all about what you pay attention to, and how you use the information that matters.
- Set up a regular review process. Schedule time to review company expense reports on a consistent basis. The more often you look at the numbers, the easier it is to see patterns. Start with a quarterly review and adjust from there.
- Capture your findings. Make a note of what worked in the past – and what didn’t – so that you can better evaluate new risks and opportunities as they arise. Look for differences and similarities between departments and individuals. The past doesn’t always predict the future, but it does inform it.
- Clarify. Whenever you find discrepancies or things that don’t add up, ask questions so that you can truly understand what the numbers are saying.
By encouraging everyone in your organization to keep consistent, accurate expense records, you can get a true picture of what happened in the past and address current issues with more insight.
Trust your gut, but double-check the facts
Being savvy about your company’s financials and making good financial decisions are two different things. Dr. Philip Zimbardo from Magnify Money said it best: “Just because you think you are financially literate does not mean you will be financially healthy.”
As you grow, record-keeping and expense management software becomes more and more important. Choose tools that make it easy to run reports, spot trends and irregularities, and filter data in different ways. With the right tools, you see things you wouldn’t have otherwise noticed.
Make tomorrow better by keeping an eye on yesterday
Give your future self a gift – make sure your organization’s expense records are as complete and accurate as possible. Look for ways to make continual improvements on the kinds of information people report. Train employees on how to gather the right kinds of data that will be helpful in drawing smart conclusions later.
As the research shows, hindsight is not only good for you, it’s also good for your financial future and that of your investors. Financial transparency is becoming more and more important, and maintaining comprehensive, up-to-date records reveals the health of your organization at a glance. With the right information, you can take risks with confidence, and reap the rewards you deserve.