Business Reporting Cycles
After writing last month's article where we considered how different time frames impact comparative metrics, I thought it would be interesting to follow that up with a look at the period of your time frames. Just like a sine wave, these types of time frames are characterized by their repeating cycle - allowing you to compare the ebb and flow of your trend more accurately, chronologically speaking.
So what counts?
A commonly used measure of time in business reporting is the 30 day cycle. While the reporting periods in each cycle can be broken up in discrete chunks, a 30 day time frame, consisting of just over 4 weeks makes for poor analysis. And that all boils down to the fact that your 30 day schedule may begin on a Monday, but your last reporting day will be a Tuesday, with your next reporting cycle beginning on a Wednesday. So, in fact, the periodicity is not following a natural cycle.
Let's compare that to a 24 hour, 7 day, or 28 day reporting cycle. This consistent time frame will, for example, always begin on a Monday and end on a Sunday. The data or trendline now lends itself to comparison - consistently every reporting period.
Towards an objective reporting cycle
The idea behind consistent time frames is that you break each monitoring period into discrete, equal chunks. Consistent time frames offer a more objective way to monitor and compare your metrics. Not only that, but each day in each cycle is parallel to previous cycles. Spotting patterns becomes much easier compared to the 30 day cycle, since you are essentially comparing apples to apples, Mondays to Mondays.
Is symmetrical reporting for everyone?
The answer is simple: no. Setting up time frames for your organizational KPI dashboard is about knowing the best way to monitor your metrics in order to increase understanding and, in turn, improve your decision making. Your KPIs need to speak to your organization's goals and improve your ability to achieve those goals. Rather than advocating blind adoption of consistent reporting periods, this article is about adding another tool (or question) to your KPI tool belt.
13 months, each 28 days does seem to add up quite nicely. Food for thought!
Missed our article last month? Don't worry, here it is:
Business Reporting - Time frames and comparison metrics.