EP09: The KPI Blind Spot: Why Entrepreneurs Crash Without Reading the Dashboard

In this episode of The Rev Room, Francois sits down with senior account manager Matt Barlow to unpack one of the most overlooked (yet vital) growth tools in business: financial reporting. They explore the common pitfalls entrepreneurs face when they ignore their numbers, what to look for in a proper management pack, and how data-driven decisions can uncover hidden profit leaks. With relatable metaphors and real client stories, this episode turns financial literacy into a powerful leadership weapon—especially for founders stuck in the operational grind.

Three Key Takeaways

1. Your P&L Is Not Cash Flow: Many entrepreneurs confuse profit with available cash. Understanding how accrual accounting works is key to accurate planning and avoiding nasty surprises.
2. Monthly Financial Reports Are Non-Negotiable: Reading your management accounts—especially your balance sheet, cash flow, debtors, and budget vs. actuals—is like checking your GPS. Without it, you’re flying blind.
3. The Right Support Can Save You 20%: A strong accounting partner isn’t a cost—it’s a growth lever. One client avoided overdraft, timed stock accurately, and saw exponential growth by simply implementing a proactive purchasing plan.

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Transcript

welcome everyone
today we're sitting with um Matt Ballo
one of our key account managers at Buzz
Rev welcome Matt thanks man
nice to be here cool
so today on the Rev Room we are probably talking about
the most important factor involved in any
entrepreneur's business life
and we're talking about
are you actually reading your numbers
and are you actually understanding your KPIs
so Matt seeing where we are
what happens when business owners ignore
financial reports
well I mean
I think then they're missing 80% of their business
because they're not getting the full picture
they're getting the operational um
side then they understanding that completely
and nobody knows that better than them
but from a numbers point of view
it's it's completely factual
and it tells you the full story of your business
if you'll listen
so exactly so Matt
if you're not reading reports
you you're instead not being able to plan
and you're not been able to execute correctly 100%
I mean it's it's like running a business
let's use the metaphor of driving a car
I mean it's like trying to drive blindfolded I mean
it's just a whole another aspect
of business that you're missing out on
and I mean within the numbers
there a million different opportunities
depending on your line of work
and depending where you looking um
I mean as as you know
we've spoken about it a few times like in business
there are always leaks if we can call them that
there's always ways that money is spilling out
there inefficiencies
and the more of those leaks you can plug
the better
so looking at your management accounts there
it it
it gives you the full story
if you wanna dive as deep as you want to into it
but just
getting a general understanding of where
your business is flowing
and what direction you're heading it in
if it's the same direction that you wanna go
hmm um
great and so Matt
what
what reports would you give any entrepreneur an advice
what reports would you what you
referring to as a management pack or something
give us some details and specifics
so I mean there are the general few that we can look at
which is a profit and loss
and whether your business
actually is making money and generating a profit um
that might be that
you're not actually seeing it in cash
could be that you're acquiring assets
which is um leading into the next report
which is your balance sheet
which I actually feel is one of the most important
because it actually gives you the full business
the full picture of your business
it's you know
from prior years as well
that's almost carried forward with the balance sheet
whereas
the profit and loss is sort of a fixed timeline um
the your
your cash flows is obviously crucial
whether you
going to have enough money in the bank to pay salaries
so that's also crucial to
to make sure that you've got in it there
and then I mean
we can look at a few others I've got um yeah
a list of a few here but um
it it can also depend on the type of industry um
another one we can go into and we can spend
you know an hour on each report actually
if we wanted to but um
I think from the cash flow also leading into that
we can talk about the debtors and creditors
when you need to pay your suppliers
and when you hopefully gonna get paid um
and then the next one
which I think is crucial and takes your business
to the next level is your budget
and tracking your budget to what is actually happened
because that way
if you're looking at your management reports
generally without a budget
you looking in the past and what's already happened
and trying to alter that for the future
where your budget
you've already planned what you're gonna do and
you know all that information beforehand
and hopefully you track it from there perfect
so so in the business the entrepreneurial journey
having read your financials which is the first step um
do you think a
lot of entrepreneurs can actually read a balance sheet
and read a a financials
in your experience generally no
because I mean there's it's it's quite a complicated
thing to understand I mean
where all the numbers go where your money is flowing
I mean generally it's almost
I've seen it a couple of times
where guys look at a profit and loss
and they assume that's their cash flow where
you know most of
most of these entrepreneurs are working on
the accrual basis
which means that if an invoice is dated
end of the month
and they only have to pay that in 30 days
that invoice is expensed on the
at the end of the prior month
so if it was dated in June
it will be expensed in June
even though it might be paid in July um
that's you know those are sort of some of the areas
where they might be missing out on
and that's
where it's crucial that you there to support them
because they've obviously picked up something niche
and something where they can add value
and accounting and management reports
and understanding your data and your numbers
it's it's a language it's it's it's like learning
you know
another language and how to be able to read that
sometimes you need
you know the additional support in the con um
consulting side on that as well
to make sure that
you pulling the business in the direction you want to
because the numbers will show where
where you going so in the world we were living today
the financial world um
data is obviously important
and so you're a numbers guy and if you
you've got all these numbers together
and actually understanding it is an issue
and compiling it is another issue
how often and first the two questions
how often would you suggest
someone looking at numbers and analyzing the numbers
and the second is what process
and what software would you use to make it easier
so I mean management accounts
I think it should be minimum once a month this
this Dan age with softwares and things going on I mean
we generally aim to get management accounts
I think we say on the 15th of the month
so sort of halfway through
but I've had cases
where I've sent them out on the 2nd of the month
because it's I mean
this then age the data and everything
it flows a lot quicker and
if the clients keeping their information up to date
we can we can do our job quickly
so it's all about if it's broken on their side
and they're not providing the information to us quick
enough and um
we not doing our job
you're never gonna get the numbers
you need both to work in harmony
and we can't do our job if they
if they don't do theirs
and they can't get the management reports
if we don't do our job either
so it's this constant sort of flow from both sides
and once the system works
I mean the value you get out of it is tremendous
all of a sudden you know when you can pay dividends
what your taxable position looks like
what cash in the business is
not actually working capital
but excess cash flow um so all of these
you know it depends because you can
reports are so broad
and you can look at a million different reports
you can look at the management reports
which generally you like to look at
the taxable position and where your business is going
but the operational reports
if you're in a manufacturing business
that it's worth maybe looking at every day
every week depending on where you needing to go
and that type of report so
you're suggesting the key performance indicators
or different indicators within a profit and loss
or balance sheet could be looked at on a weekly basis
without a doubt without a doubt and if and that all
comes down to is if your business
and your team are doing the right work
and keeping the admin and um
all of that up to date
to ensure that the system does its job
and you need a good accountant with
or a good bookkeeper that
that makes sure the correct allocations are done
and you can look at the management perfect reports
so you're suggesting that the success of any business
uh one of the key pillars is reading reports monthly
understanding what you're reading and applying the
a different decision making
based on what you're reading right
completely in your journey
have you got any wins or any
any clients that you can refer to
that actually have done well
out of analyzing their numbers effectively
and being able to be in a position
to make the correct business decision
with actual numbers at their fingertips
yeah so I mean
there there are quite a few of those
I think if we had to dive into one unique one
if I could say it like that
this was a business that we worked quite closely on
and they were quite heavy in stock
and they needed to be because plait is quite seasonal
so what happened was
is it was quite a risk averse clients
they never wanted to go into overdraft
so we had to run the purchasing plan quite heavily
to make sure that they would have enough stock
for season but also not run into a negative cash flow
and making sure that they're not in overdraft
and we ran that quite close
and I think they got to about 30,000 rand in the bank
end of November and December did its thing in plate
and we made it out of that
and through that
they've been able to grow significantly for that
I feel that that was almost the kickstart
that expanded their business
and now we've seen sort of exponential growth
which is quite exciting and yeah
I mean exciting to see where this business gets to
but it starts with just putting
even a purchasing plan together
and that's something that can be built
into your management reports
and it's something that you and your accountant
your consultant should be looking at all the time
and ways that
that's an aspect of my business I wanna look into
let's have a look at that
and people are often too scared to
pay the fees in there but I mean
I ask you listen if it's
sometimes it can make as big of a difference as 5 10
I mean we've seen 20% of your turnover and with a
let's call it a 30% GP
that number becomes quite big and that's huge yeah
your fees are rounding error
so it's
it's about getting to that point and making sure that
you know
if you want to strive for excellence and be great
it's about working with the right partners that wanna
take you there as well
and the reports are one part of that
because it's actually the summary of your hard work
yeah and your teams as well excellent
um thank you
Matt for joining us and giving us that great insight
so if you wanna scale your business
and grow your business
there is no doubt reading monthly financials
understanding key performance indicators
on a regular basis
is this the foundation of growing your business forward
thank you