Harness the power of information

Tough management decisions should always be based on information which is both timely and accurate, making comprehensive management information systems (MIS) a non-negotiable lifebelt for any business with a will to survive, says Alan Williams, managing director of Southampton-based independent accountants and business advisers, HWB.

"In good times businesses can, to a greater or lesser extent, get by with limited management information. But in today's economic climate, having quality information on which to take decisions and take them quickly can be vital," advises Williams.

"Assumptions have led to the demise of many businesses which is why the quality of information used in any decision-making process is so crucial. In some cases a poor MIS is worse than none at all because information which is incomplete or out of date can only mislead, resulting in ill-informed decisions which can be damaging."

A company with an efficient, up-to-date MIS will have a clear picture of all aspects of its business at any given moment in time because a well-managed system should provide all the necessary key performance indicators. This enables potential issues to be flagged up before they create serious problems and allows directors to respond to changing market conditions and make best use of human and financial resources in both the short and longer terms.

Bank covenants often include the requirement to supply regular management information and lenders are now insisting upon reviewing management information more closely to identify problems at an early stage.  Failure to supply information on time will be a breach of covenants, which could ultimately lead to the withdrawal of much-needed funding facilities.

"There's no doubt that good MIS is an essential ingredient for  a successful business and the experience of an independent adviser able to stand back from day-to-day operations and give an independent opinion to the interpretation of data is invaluable," concludes Williams.  "The tide of information is relentless. Knowing how to harness its power is the key."

For further information on implementing and interpreting MIS, contact Alan Williams at HWB on 023 8046 1200 or visit www.hwb-accountants.com

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