It’s no secret that some problems need fast solutions in our fast-paced world. However, it’s also common knowledge that most “quick fixes” create more issues down the road, leaving the situation worse than when it started. And despite our best intentions to come back and fix it later, it rarely happens, which is why the next profit parasite we want to highlight and eliminate is the issue of quick “fixes” inside of your business.
Keeping with the theme of business privacy, the business we will be discussing today is Astro Nexus Ventures (ChatGPT said this combines the cosmic theme of ‘Cosmic Confluence’ with the tech-savvy vibe of ‘QuantixNode Solutions’).
Astro Nexus Ventures (ANV) made the all-too-common mistake of choosing a quick-fix solution that turned into a long-term issue and profit drain. In a well-intended attempt to work with a client and temporarily reduce their monthly invoices, ANV flagged certain invoice line items as “do not bill.”
You can probably guess what happened next… ANV never reversed this change, and the client continued to be billed a lower amount on their invoices, leading to decreased top-line revenue and profitability. Without the ability to track both top-line and per-client revenue and profitability, services continued to be provided without payment.
To address the issue and prevent further mishaps, ANV partnered with Resplendent to identify, eliminate, and prevent the profit parasite by implementing custom dashboards to track invoices and identify revenue change.
Symptoms of the Quick-Fix Parasite
With intentionality and as a “one-time” solution, quick fixes can benefit companies in a bind. Yet, if not properly monitored, those decisions can lead to bigger issues down the road, making it essential to have systems in place to track and identify vital data.
But how does data visualization help identify quick fixes and the dangers they bring to your business? It starts with knowing the symptoms. Here are the symptoms ANV faced and some thoughts on how your business can learn from their mistake.
Unexpected revenue shortfall
What ANV experienced:
- There was no clear explanation for why this client was generating lower revenue for the services provided compared to other similar-sized clients and previous invoices. All aspects of the billing process appeared to be the same, and no services had changed.
How this might show up for you:
- When all systems and operations remain the same but lowered profit or varying outcomes occur, it likely indicates an underlying issue.
Unexplained cost variations
What ANV experienced:
- Expenses to complete the client’s projects remained the same, while profit margins appeared unusually high or low – potentially masking the billing error.
How this might show up for you:
- When business operations seem standard, but when profits seem too high or too low or previously unseen benefits or problems show up, it could be a sign of unseen errors.
Inaccurate profitability reports
What ANV experienced:
- The breakdown of per-client profitability was misleading. It showed that per-client profitability was lower (and sometimes higher) than expected, potentially hiding the client being undercharged.
How this might show up for you:
- Trusting “big picture” reports for business success can be misleading. Always investigate profitability, expenses, and other factors on a client-level basis.
Decision-making hindrance
This might rear its head as a result of the problem rather than an immediate symptom.
What ANV experienced:
- Low profitability skewed the decision-making process when allocating resources to the client and making pricing changes.
How this might show up for you:
- Erroneous profitability data could lead to poor client resource allocation decisions, pricing changes, or customer retention.
Identifying and Resolving the Profit Parasite
After learning to identify the symptoms of the quick-fix parasite, the next step to elimination is using data visualization to identify and resolve the issues at hand.
Here’s how Resplendent Data helped ANV visualize its profit data, illuminate the profit parasite, and set up preventative measures.
Track revenue change by customer
What we did for ANV:
- We built dashboards that tracked the percentage change in revenue from invoice period to invoice period, segmented by customer. This helped identify unusual drops and rises in revenue for the affected client compared to its historical trends or similar clients.
What this means for you:
- Our custom dashboards can highlight specific information to draw attention to any aspect of your business. This can help you identify potential pitfalls and implement systems to prevent them from reoccurring.
Identify non-billable line items
What we did for ANV:
- We created a chart that keeps track of the amount of non-billable revenue to help identify invoicing issues.
What this means for you:
- Our custom dashboards go beyond showing just data. We can help your company create custom ways to display data to track new issues and ensure they no longer go unnoticed.
Profit margin trends
What we did for ANV:
- We built a custom dashboard to monitor overall profit and customer-by-customer profit margins. Comparing customers’ margins made it easier to identify outliers, especially when similar service plans group the customers.
What this means for you:
- Resplendent can create custom dashboards with custom groupings and identifiers to make tracking customer or business data easier. When monitoring information is more accessible, identifying profit loss becomes more manageable.
Evolving Business Data
Implementing custom solutions from Resplendent did more than eliminate the profit parasite for ANV. It set up robust data streams to help prevent further issues. ANV is now better prepared to tackle any missed quick fixes and accurately manage its revenue and profitability. Our goal at Resplendent Data is to deliver robust data that provides actionable insights for your business to address immediate and future issues. If you’re ready to see how magical your data can be, schedule a demo with us today and take the first step towards eradicating profit parasites from your business.
