Data-Driven Decision-Making: Cash Flow and Financial Health

Does your business use data to ensure that all activities support financial growth? 

With 65% of organisations confirming they plan to be fully data-driven by 2026, now is the time for organisations to consider how to implement processes which ensure data-insights are always available.

Whether you want to master the art of data-driven decision-making to help grow a business or simply want to shine a light on cash flow and overall financial health, at Hysons, we offer support to make this possible for all companies. Keep reading to learn how data-driven decision-making can impact cash flow and financial health.

What Is Data-Driven Decision Making?

Data-driven decision-making, otherwise known as DDDM), uses a selection of metrics and real-time information to support decision-making. This means companies can obtain a view of the bigger picture when making changes to operations.

By using data to make business-critical decisions, bias is eliminated. Instead, factual insights and financial projections are used to ensure that only choices that are in a company’s best interests.

How Does Data-Driven Decision Making Connect With Cash Flow and Financial Health?

One of the top pieces of advice we offer for companies looking to build a profitable business is to remain connected with cash flow and overall financial health.

If a cash flow is not healthy, a business can be left without the funds required to trade. This is also pivotal when it comes to scaling a business, as changes cannot be implemented without an assurance that future operations will be able to cover changing operating styles. 

Choosing DDDM for all business changes ensures that the bigger picture is always maintained. Without considering data indicators, such as value vs volume and a product’s life cycle, companies can be left trying to plug financial holes in the future. Making decisions that have data backing reduces the risk of making changes, provides data that can be reflected on when making future decisions and protects the financial health of a business in the long run.

Example of Ways That Data Can Improve Financial Positions for Businesses

Below we’ve gathered some examples of how DDDM directly impacts cash flow and a company’s overall financial health. 

Shaping Marketing and Sales Campaigns

Although marketing and sales teams can use factors such as seasonal demand or consumer trends to shape campaigns, this doesn’t always mean that a strong ROI is achieved. Data-driven choices,within these areas of business, ensures that all outreach activity can be connected to the financial needs of a company. 

Examples of this include investing in PPC only for lower-performing products to improve sales or running campaigns for high-value items when cash flow needs to be improved.

Better Inventory Management

DDDM in terms of inventory ensures money is spent wisely on replenishing stock and ordering new items. This means that there isn’t a large gap to fill between purchasing and selling items ensuring cash flow remains healthy.

Pricing Strategies 

Analysis of the data that surrounds price points, such as average cost per sale or consumer budgets, data allows businesses to maximise on ROI. These strategies can be used anytime but are particularly effective during periods when cash flow may be projected to drop, such as quiet seasons.

Choose Hysons for Data-Driven Financial Services

Businesses can’t afford to shift their attention away from the strength of a cash flow or the overall financial health of their organisation. DDDM ensures a focus is always maintained. 

Our business planning services are tailored for organisations who wish to use data in a way that improves financial performance. Contact us to learn more.