As part of our ongoing partnership with Raise Africa -an equity management platform- we both teamed up to host X (formerly Twitter) Spaces to discuss the importance of financial data for business decisions. 

In the enlightening session titled “Improving business decisions with financial data”, Fincra’s Senior Data Analyst Oluwatobi Akeredolu and Ozichi Chijoke-Nwauche shed light on the transformative role of financial data in business decision-making. 

The session emphasised the importance of leveraging financial data for sustainable growth in today’s competitive business environment. 

Here are five key strategies to consider when utilising financial data for business success:

The speakers, Akeredolu and Chijoke-Nwauche, laid the groundwork by defining and differentiating financial data and financial modelling. 

Chijoke-Nwauche defined financial data as the raw material upon which a robust financial model is constructed. This model is a powerful tool for predicting scenarios and making informed business decisions. 

“The model you can build out of the data,” she said. “Data is the foundation upon the model is built. The essence of modelling is to make decisions.” 

By Akeredolu’s definition, Financial data is the input used for the model. Input is an algorithm, a set of codes, to predict how our decisions affect the state of our business. 

“If this is how much I am spending on my business (on staff, marketing, etc.) and customer revenue. How many customers do I need to meet my revenue target? How many customers do I need to push through in that market,” he said while explaining how financial data and modelling work. 

 “Financial data is that input, the current state of things that I am using to predict a model. What you use to predict and make a decision is the financial data placed inside a model. You can’t have a model without financial data.” 

By integrating data-driven insights, businesses can anticipate market movements, assess risks, and plan strategically. A well-constructed financial model is imperative for steering a company towards its goals and objectives.

The speakers emphasised the importance of aligning data collection strategies with the overarching business goals. Before delving into data collection, it is important to understand the company’s vision and goals clearly. 

A clear definition of the business’s objectives provides a roadmap for effective data collection, ensuring that the insights derived are directly relevant to the company’s growth trajectory. 

“When I join a company in a data role, I like to start working with the end in mind. I do this by speaking to key stakeholders by asking questions like ‘what is our goal’,” Akeredolu said. 

“This would determine the kind of data I will gather, the process, and how I will go through with the data funnelling, data processing and communication.

Chijoke-Nwauche noted that businesses must have goals clearly defined to have any chance of success. 

“One thing that I have noticed is that sometimes people get carried away by the idea of owning and running a business but somehow lose sight of the purpose of the business,” she said. 

“If your business is not geared at making revenue and profit, then it’s not a business. It might just be a hobby or something you are doing. 

“For your business to truly succeed, the goal should be clearly written. “The goal of the business should be easy to understand. The easier and more aligned you are with your goal, the higher your chances of success.” 

Tailoring data collection strategies to suit the specific business model is critical. 

Akeredolu highlighted the significance of a systematic approach to data collection, utilising various touchpoints such as sales, customer information, etc. 

Neglecting certain data points could result in an incomplete business picture, leading to flawed projections and inaccurate decision-making.

“The way you collect your data will be guided by the goals you set. It will depend on your business model,” Akeredolu said. 

“Take, for instance, an ecommerce website; a record is produced for every transaction. That record is funnelled into a database at the end of the day. From the database, you can extract your data points. These data points could include the number of sales, customers, etc.” 

Chijoke-Nwauche emphasised the need for a comprehensive understanding of the entire business landscape, advocating for data collection from multiple sources, including CRM, point-of-sale systems, and backend data. 

“You are going to have sales data, customer data and even staff data, automated data like automated transactions, etc.,” she said.

“All of these different points are different ways of collecting data. How you as a business decide to apply and implement that data is very important. 

“If you are an e-commerce company and do a good job of storing data at different sales that you have and somehow, not doing a good job of collecting customer data, then the business is going to suffer. 

“So, for instance, in your first year of business, you have been able to record at different sales points, but if you have not done an excellent job of capturing customer data, you will have a problem of not knowing who your customers are. 

“Have a wholesome perspective because one led data is not enough; you need the whole picture. From CRM, point of sales and back-end data. 

“All of the information should make sense so that when you are making projection or making valuation, everything will make sense. You are not using only one data, you are using the whole datab and understanding every part of your business. It will help you set the pace for the sucess of your business.” 

The speakers during the session gave some examples of some of the business decisions that businesses can make with financial data. 

Chijoke-Nwauche emphasised the role of financial data in budgeting, resource allocation, investment decisions, and risk assessment. 

“You need to go back to the data to find out the part of the business that would need more cash flow; is it salary, operations, etc,” she said.

“The data has to let you see the part of your business that requires a raise. This is important if you are planning a raise.” 

For assessment, businesses can look at where their business is more prone to risk based on financial data. 

“Identifying the risk point will not be difficult if you have been collecting data. If there were 200 complaints on uncredited transactions to your account, data can tell you it is a huge problem. With data, you can come up with solutions to mitigate that risk,” Chijoke-Nwauche said. 

Akeredolu stressed the importance of using data to understand market trends and respond proactively.

“You can easily understand what is happening to your business and the next steps. You are flexible and always ready to act,” he said. 

Aligning business Key Performance Indicators (KPIs) with the data-driven models is essential for monitoring the company’s progress. Tracking KPIs with the financial model ensures that the company remains proactive rather than reactive. 

Monitoring KPIs helps identify areas that require attention and aids in adjusting strategies accordingly.

“Your models show where you are meant to be; your KPI shows where you are. Constantly tracking KPI in allegiance to your models makes you more proactive and not reactive,” Akeredolu said. 

By integrating these key strategies, businesses can leverage financial data to make informed decisions, mitigate risks, and position themselves for long-term success and growth. 

The valuable insights shared during the X Spaces event, organised through the collaborative efforts of Fincra and Raise Africa, underscore our commitment to supporting businesses in their journey toward growth and prosperity.

As part of our dedication to empowering merchants, we introduced the Fincra Partners initiative, a platform designed to foster collaboration and provide resources for businesses to thrive. 

Through this program, we aim to facilitate meaningful connections and offer valuable benefits to our merchants.

The Fincra Partners initiative comprises two components: Perk Partners and Referral Partners. 

Perk Partners, including esteemed partners like Raise Africa, play a vital role in enhancing the operational efficiency of our merchants. 

By extending exclusive discounts on their products and services, Perk Partners enable businesses to optimise their operations and maximise their potential for success. 

Raise Africa, as one of our esteemed Perk Partners, offers an exclusive 10% discount on all services to Fincra merchants, further underscoring our commitment to fostering a supportive and thriving business ecosystem.

Through the Fincra Partners initiative, we remain dedicated to empowering businesses, fostering collaboration, and providing the necessary tools for sustained growth and success.

Together, let us continue to build a vibrant and thriving community of businesses, driving towards collective prosperity and achievement.