How to Make the Best of Real-Time Financial Insights

Financial reporting and bookkeeping are (or certainly should be) the foundation of your business strategy. It's more than just balancing books. It's about forming an accurate picture of where your business stands and where it's headed. Every CEO knows that a clear and up-to-date financial picture is not a luxury — it’s a survival necessity.

Bizarrely, this is not yet the norm.

Most startups are still using tools and systems that provide out-of-date information. Even a delay of several weeks can be catastrophic. Imagine explaining a health issue based on your physical symptoms from the previous month to your doctor. This is effectively how startups are running their financials and bookkeeping today. 

The problem with delayed financial information 

When you can only see last month’s data, you don’t really know the current state of your business trajectory. 

Think about this. If your financial data is delayed, you might currently be analyzing your December 2023 financials, while February 2024 has already begun. That's nearly two months outdated! 

You can only change course direction so fast with old data. With real-time data, you can fix issues as they arise, before they grow into business-ending errors. 

Take your monthly expenses as an example. 98% of companies observe the variance in their monthly spending and financial reporting after they are onboarded to our accounting software. This is critical for accurate month-to-month comparison — so you can slow down spending before it gets out of hand. 

Single-month financial snapshots are also misleading. It’s easy to justify red flags as a “one-time thing.” It’s harder to ignore an ongoing trend. You need a full financial picture that includes actual cash flow. 

Consider real-time data your best chance at building a successful company. 

• Better fundraising prospects: Real-time data offers a competitive edge when presenting to investors. It could be what makes or breaks your round. Investor Jason Calacanis points out that disorganized accounting is a major red flag for companies seeking investment. 
• Seize strategic opportunities: Outdated financial data may cause a business to overlook time-sensitive strategic opportunities. Financial insights can help you find ways to protect your revenue that compound into the future. Data delays cost real money. 
• Show a clear vision: Blair Silverberg, Co-founder and CEO of Hum Capital, highlights the importance of using data to articulate a clear story about your company's potential, particularly in unstable market conditions. The strategic use of real-time data and insights can greatly influence a company's valuation and fundraising conditions.
• Prevent cash flow challenges: Accurate financial insights lead to better judgement in overall spending and smarter budgeting decisions, helping to avert cash flow issues
• Improve forecasting accuracy: Relying on outdated data can skew business forecasting and lead to misguided strategies. Access to real-time insights enables more accurate predictions and informed strategy development for your business.
• Choose stronger financial partners: Kevin Bennett, CEO of Caribou, suggests building a strong team, including board members and investors who align with your company’s ethos. Having a transparent financial picture can help you attract the right financial partners. 
• Mitigate compliance risks: Reliance on outdated figures can lead to non-compliance with financial regulations and potential legal repercussions. Real-time insights help your team maintain compliance and avoid such risks.
  

How to get real-time financial information for your company

If an investor asks for your real-time financials today, can you access them?

If not, this could jeopardize your next round. It's not just about meeting investor and board member expectations for transparency and clarity; as a founder, this level of financial insight is crucial for your decision-making process. It shows you have a high level of competence where it matters. Addressing challenging questions and backing up your strategy with real-time data increases your chances of securing funding and your company's likelihood of success.

The era of delayed data is quickly coming to a close. The technology we have at our fingertips today can provide you with real-time financial data for your strategic planning and forecasting. And they could completely change the growth trajectory of your business. 

Tools like Puzzle let you get real-time financial metrics like cash, burn, runway, ARR/MRR, and more. You can even get reconciled real-time Stripe revenue. Puzzle does this all automatically.

If your current accounting tool doesn't let you see real-time financial information, you will have a harder time. It's worth examining your current tool to see the delay in your financial data.

If you find out that your accounting software does not, in fact, offer real-time financial reporting, act quickly. You'll not only avoid a host of headaches and problems down the line, but you will immediately start making better financial decisions for your business that will start compounding.

Try real-time accounting for your business at puzzle.io.