What information do I need to run my Business?

Today it is becoming more and more common to find Directors of successful businesses who are under 30. These directors are highly driven, passionate about what they do and have great ideas. They also have something else in common, they are not afraid to ask and not afraid to admit to say they don’t know something, what is even better is that they engage with the people who do.

We were therefore delighted when a Director of a highly successful start-up asked us what information he should have to tell him about his business and that he didn’t know what this Management Information should look like.

This article is to give you some insight into the different levels of information, what it is used for and then a bit around Financial Information that EVERY Company Director should have at his fingertips.

3 Levels of Information

How it is linked together.

Strategic information is used to set the direction of the business and its underlying purpose. It includes priorities, resources, and company outcomes and ensures employees are working towards common goals.

The content will include Financial, Visual and Narrative information.

The board will assess the Company’s performance against this plan in each board meeting.

A good Strategic Plan will be easy to flesh out and flow into the Tactical Plan.

The Tactical plan will define how the Company objectives will be achieved and will include short term actions. It will include the Financial Targets for the Company and in larger organisations will set Financial Targets for departments. It will also include details of how individuals will be targeted to achieve the Company Goals.

Tactical plans are usually used by the Middle Managers and will be referred to regularly, usually monthly. The Financial Portion is often known as the Budget or Forecast.

Managers would look at the monthly Company performance against the Tactical plan to ensure the Company is on track. This is often referred to as “Actual against Budget or Forecast”

If everyone waited until the publication of the monthly Tactical information then there would be a significant period of time during which no one would have visibility of what is going on in the business. This is where Operational Information fits in.

This is detailed information used at the coal face and enables fast day to day decisions and action to be taken.

Examples might be real time stock information so you know when you need to re-order stock in order to meet customer orders. It could be details on your debtors, so who owes you money. This would be sent to the Account Managers so they could include the requirement for payment on the call they are having with the client.

Operational information enables the wheels to keep turning and is used by many different people in a Company.

What does Every Director need to know about their Business?

Let’s look at the Tactical level and the periodic information you need, to know what is going on in your business. Depending on your business this would generally be weekly or monthly.

We’ve seen this ‘pack’ referred to as the Information Dashboard, Actual Vs. Budget, Month End Pack, Management Pack, MI (Management Information) and many other references.

Let’s assume you have a Financial Plan of what you want to achieve in the year and we will call this the Budget and we will call the ‘pack’ the MI.

The MI should include the following:

Item What it is Why?
Income Statement – Actual Against Budget This used to be called the Profit and Loss. It would demonstrate where the Company profitability is and if it is on track. It would show Sales, Cost of Sales, your Gross Profit, Overheads and Net Profit. This would enable action to be taken to improve income or review expenses.


Cashflow Forecast A view on how long your cash will last and where it is spent. Simply put… you don’t want to run out of cash. That would be bad!

This would give you visibility on whether you need to take action to ensure this doesn’t happen rather than it being a surprise.

Debtor and Creditor days These are 2 numbers which tell you how long your customers are taking to pay you and how long you take to pay your suppliers If your creditor days are lower than your Debtor days then you are paying out before you have the cash in.

This also gives you an indication on whether you need to enhance your credit control processes and chase up your customers.

Sales Information This would be Company and industry specific and would include details on significant deals in the month and key customers.


It might include a summary pipeline of opportunities.

This means you know who your key customers are and if you are reliant on certain ones.

It would demonstrate sales team performance and highlight if action needs to be taken to improve sales.

Financial & Operating KPI’s (Key Performance Indicators) Debtor and Creditor days are examples of these.

There would be additional ones depending on your business, however see below for Financial & Operating KPI’s every business should have.

This gives insight into Financial performance and stability.
Company specific KPI’s These are indicators of the performance of identified areas of your business. An example might be Customer Satisfaction. This might be vital to your business and therefore if your KPI suggests only 20% of your customers are happy, you need to know about it.

Stock is another one. This would be an important area for manufacturing and retail.

It’s important to know what KPI’s are relevant to your business, there are hundreds you could use.

Once you have these you can quickly assess if action needs to be taken and if you are on track.

Other There is an argument for a Balance Sheet and for some Managers (Finance and Managing Director) this would be relevant, for others it is less relevant.


The pack could have appendices to it which break things down further.

This is where the information would be tailored to your business. It might also include trending analysis (comparison to other periods, years and over time).

Financial and Operating KPI’s

KPI Type Calculation How to interpret
Net Profit Margin Operating Net profit/sales (Turnover) = Profit Margin Your net profit margin is set as part of the strategy of the company. This shows how much profit you want to make.
Gross Profit Margin Operating Sales – Cost of sales/selling price Industry specific and should be enough to cover your overheads and achieve the Net Profit Margin set above.
Debtor Days Operating Trade Debtors/Sales This should be compared with your standard payment terms.
Creditor Days Operating Trade Creditors/Cost of Goods purchased This should be in accordance with the credit terms extended.
Current Ratio Financial Current Assets/ Current Liabilities Also known as working capital ratio. Indicator of Financial Position.  Ratio of 2 or more is prudent for credit and 1.5 has become normal.

Net Profit, the last item on your income statement is the profit after depreciation, tax and interest.

This is not an exhaustive list and there are many ratios which can be considered.

Don’t Forget

It is also only as accurate and reliable as the data being used. It will only mean something if you can rely upon your data.

If you would like to know more

Here is PWC’s guide on KPI’s.

You can also get in touch with The Sunflower Group and we would be happy to answer any questions you may have.  You can reach us on [email protected] or on +44 (0)1628 854939