Business reporting is a practical necessity for even the smallest startups, giving CEOs and executive leaders the information necessary to help them improve the organization, understand the context of their efforts, and present to investors or other outside authorities.
By Jenna Cyprus
Throughout your operations, you’ll be collecting data on your performance, including your revenue, profitability, and even the productivity of your workforce. Reporting gives you a chance to organize that data for a specific period of time (usually a month), and present it so it’s understandable for your audience, often including visual aids like charts and graphs.
But there’s a catch—business reporting is only powerful when it’s being used correctly, and unfortunately, many newcomers end up making simple mistakes that compromise the accuracy, efficiency, or value of those reports.
The Biggest Mistakes Made By Newcomers
Let’s take a look at those mistakes in detail:
- Choosing the wrong reporting software. Your business reporting software is going to determine much of your fate, from how your data is organized to the aesthetics of your final report. If you choose something that’s hard to use, or unreliable, or too expensive for its functionality, you’ll ultimately end up falling behind. There are hundreds of options to choose from, including both specialty platforms and those offering well-rounded functionality, at practically all price levels, so make your choice carefully.
- Ignoring key variables. There are hundreds of variables you’ll have to look at to determine whether a strategy is effective or not. Centralizing your focus on a cluster of telltale variables can help you get a reasonable first impression, but you’ll need to dig deeper if you want the full picture. This especially becomes a problem if you get used to reporting in a certain way; you may chronically leave out data points that could help you form a more thorough, more accurate conclusion.
- Neglecting outliers. Outliers are points of data that don’t fall in line with the rest of your understanding of a given topic. For example, you might have one person who rates your product poorly out of a group of 100, or have one variation of your landing page that simply doesn’t work. It’s easy to neglect outliers because they defect from the “average” path, but in most cases, outliers can tell you more about a given variable or situation than all the rest of your data.
- Falling prey to confirmation bias. Confirmation bias is the natural human tendency to disproportionately favor evidence that falls in line with our existing assumptions, and disproportionately discount evidence that deviates from them. For example, if you already believe that your latest advertising campaign is a success, you might find yourself drawn to evidence that supports its success, rather than evidence that indicates its failure. The best way to guard yourself here is to constantly challenge your assumptions, and attempt to prove yourself wrong.
- Being inconsistent. If you’re going to report weekly, report weekly. If you’re going to report monthly, report monthly. Fortunately, most business reporting platforms have functionality that supports automatic reporting, so you don’t have to think about it, but consistency is key here; you’ll need to see the same types of reports at the same intervals so you can compare apples to apples.
- Relying solely on visuals. Data visualization is becoming increasingly sophisticated and increasingly important. It allows you to use your intuition and judge complex clusters of data points all at once, increasing your speed and efficiency in data analysis—not to mention, making it easier to show those results to someone unfamiliar with your process. However, relying solely on visuals is also problematic; you won’t be able to spot individual data points that comprise the overall story, and you may come to a false conclusion based on a misleading way that a graph or chart was formulated.
- Failing to form actionable insights. Finally, newcomers often look at data, and form reasonable conclusions, but forget to use those conclusions to create action items. It doesn’t matter how much data you collect or how often you view that data if you aren’t using the data to make your business better. Every report should cue you to take some specific action, or make a change for the better within your organization.
The Power of Experience
Unfortunately, there’s no way to avoid making at least some mistakes as you enter the world of business reporting. Hiring dedicated data analysts and data scientists, or at least consulting with them, can help you out in the short-term, but ultimately, data and business reporting is a responsibility for all roles within your company. The more time you spend on perfecting your approach, the better you’re going to get—and you’ll have to put up with a few hiccups in the meantime.
Jenna Cyprus is a freelance writer from Renton, WA who is particularly interested in travel, nature, and parenting. Follow her on Twitter.