There is a fundamental problem in the German economy: Controllers and sales staff often only compare their data with the previous year. This method may have worked in stable times, but in today's dynamic economic world it often leads to wrong decisions.
The problem with the previous year's comparison
Between 2010 and 2019, it was good practice to compare business figures with the previous year. At a time of moderate, steady growth, this also made sense. However, the framework conditions have changed:
- Extreme fluctuations: The economy experienced massive inflation in 2022 and 2023 in particular. Many companies have used these growth figures directly as the basis for their 2024 plans - a risky decision.
- Incorrect forecastsPlanning figures based on a single comparative year ignore important economic trends and long-term developments. The result: misjudgements that lead to employees being left without meaningful tasks or companies misallocating their resources.
Why the big picture is crucial
Profit is made by deviating from the plan. However, if the plan is flawed, this not only results in financial losses, but also in strategic mistakes. A one-sided comparison with the previous year provides a distorted picture that takes neither long-term development nor external factors such as economic cycles or market changes into account.
An example:
A company that sets its prices on the basis of the previous year's growth ignores the effects of inflation, supply chain problems or changing consumer habits. Such isolated decisions can lead to prices being set unrealistically or market opportunities being missed.
Our approach: putting data in context
In order to make informed decisions, it is essential to look at the big picture. Our income statements are designed to show more than just the previous year's figures:
- Long-term perspectiveWe analyze business figures over several years in order to identify long-term trends.
- ContextualizationData is placed in the context of economic development in order to better understand fluctuations.
- Stories behind the numbersA good report not only shows figures, but also provides the "story" behind them - why a value has risen or fallen.
Data-driven decisions instead of short-term comparisons
Today's economy is more dynamic and complex than ever. Companies that continue to compare only with the previous year run the risk of overlooking important opportunities or being guided by false assumptions. Instead, controllers and sales staff must:
- Data from several years to smooth out fluctuations and trends.
- Using analytical toolsthat provide the overall picture.
- Understanding connectionsto draw the right conclusions from the data.
Time for a paradigm shift
The times when a simple comparison with the previous year was sufficient are over. Sound decisions require a deep understanding of the data and its history. With our approach, we help companies to see the big picture and thus future-proof their strategy.
Do you have any questions or would you like to find out more about our methods? Get in touch with us - We show you how you can use your data for sustainable success.
