|
Streamlined Business Data Can Help You Through Downturn
 From an owner’s perspective, nothing is more important during a deep downturn than knowing the exact status of your business, or where and how to quickly get critical information that will help you survive.
A cluttered database and record system — with its accompanying inaccurate record keeping — will prevent you from getting the timely, vital information you need to work through the downturn and position your company for the market’s eventual return.
So, take the time now to clean out the old data in your computer system, trim and streamline your systems, increase the productivity of your database and regain a mastery of your business.
Here are several steps you can take:
- First, recognize that the more unnecessary data you have online, the tougher it will be to find the information you need. Think “efficiency.” In this case, less really is more.
Even if your system has infinite storage capability, don’t overfill it with unimportant information. Separate the current information and data that is pertinent to your company’s ability to move forward.
- Consider what you need to have perpetually versus periodically.
In other words, store the information that you’ll need on an ongoing basis as well as information that you’ll need from time to time — and create parameters that will enable you to get the information you need quickly.
Systems can’t deliver what you need without your manipulation; however once you set the right parameters, you can increase your efficiency tenfold.
- Know your history.
Figure out what information you needed in the past — payments, bids, product costs, warranty calls, employee records, plan and option details, job cost details, project reporting — and determine how vital these categories are now.
Some of this information may be job-specific and can be archived and eliminated from your database, but some may be valuable for future jobs and references and should be kept in your database so it can be retrieved quickly.
Every accounting, sales and production (purchasing) application has master and transaction files. Your vendor or consultant can help you identify what these are.
Once you have a list of applications and files, determine how to keep what you need and eliminate the obsolete data.
If you have a little trouble figuring out what to keep and what to discard, think of your data as clothes in your closet. If you haven’t worn it or used it in two years, you probably won’t in the future.
How to Manage Your Transaction Data
The usual shelf life of your payment, job cost and general ledger data should be two years. All jobs within a community should be kept online; however, you may want to summarize the detailed data a year or so after closing to reduce the files.
On the production side, bids (and unit prices), should be kept online as long as you are comparing active vendors and like products.
For example, you may want to compare the cost of building a plan using different vendors or compare two similar plans that have specification changes so you can see the differences in construction costs.
Never remove a vendor or bid that is still be attached to a live job. Budget data should be kept for every job that is still in the building cycle — as well as the current year.
The same principle applies to plans and options. If the details are in use or if the plan and option series will be copied to a new series, keep them online.
However, you should purge obsolete pricing and bid data as well as information about vendors who no longer do business with you. The same goes for plans and options. The bill of material details, if you never plan to use them again, can be removed without removing the library containing the plan or option name.
Organizing Your Master-File Data
In an accounting system, master-file data are general ledger accounts, old financial statement formats not in use, vendors, obsolete employees, tax codes, liability insurance records and job information.
Bear in mind, you may need the job information if it remains part of (populates) your warranty history system longer than you expect.
Production information that can be purged includes subcontractor information to clean up, bid files, 1099 data and old schedules that are no longer used. These can be deleted when they are not attached to any live or forthcoming job or project.
As for your sales system, I would suggest that your clean up salesperson and broker records and eliminate community specifications that are several years old or older.
As you move through this entire clean-up and streamlining process, you will discover capabilities you never dreamed existed.
Once completed, you will have a system that works for you. You’ll have data at your fingertips that is pertinent, and you’ll produce reports and queries that are relevant, accurate and up-to-date.
The bottom line here is that by simplifying and trimming your database, you will be putting yourself in a position to move forward.
Bill Allen is president of W.A. Allen Consulting and a longtime contributor to NAHB’s Business Management & Information Technology Committee. His company, headquartered in Redmond, Wash., provides information technology consulting services and process management assistance to the home building industry.
For more information, e-mail Allen, call him at 425-885-4489 or visit the W.A. Allen Consulting Web site at http://waallenconsulting.com.
 Take Control of Your Finances
“Accounting & Financial Management for Residential Construction,” available through BuilderBooks.com, is a sold resource for builders, remodelers, developers and contractors that provides detailed information on how an accounting system operates and the basic principles for processing financial data.
To view or purchase this publication online, click here, or call 800-223-2665.
 NAHB Has Nearly 300 Resources to Help You Run Your Business More Profitably
Go to NAHB's Business Management Tools Web pages (available to members only) for instant access to nearly 300 timesaving, moneymaking and cost-cutting business resources to help you run your business more profitably. Get guidance on accounting and financial management, business strategy, computers and information technology, customer service, human resources and more.
Resources are added weekly, so bookmark www.nahb.org/Biztools to go directly to these vital business management resources.
|
