We’ve come to the last of the three big numbers, the Meth effect.

It is likely that your financial data is masking your financial reality. How does that occur? Well, there's a bunch of reasons it can occur and it is a very dangerous thing to have in your business.

I’ll give you an example of the kinds of things that do occur, we worked with a business to help with their profitability. When we analysed their reporting systems they had one profit and loss report covering all divisions so they could not tell which divisions within their business were making money and those that weren’t. So, on reviewing their business we found that one division in their business was losing $20,000 per month which was masked by the other divisions in their business doing so well.

That monthly loss of $20,000 had been happening for about five years, if you do the numbers on that it’s over a 1 million dollars in losses that the owner didn’t know about which is quite devastating. We had the opportunity to fix it and immediately improve their profitability by $20,000 per month and their cash flow followed as well.

That’s just one example of how your financial data can mask your financial reality.

Stay tuned for more information soon!

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