Lesson from “Living Tiny”
My family and I recently decided to move into a 30ft travel trailer. There were a myriad of reasons that led us to this decision, ranging from finances, minimalism, desire to travel, more quality time together, and the opportunity to live on our friend’s beautiful property. The idea of living “tiny” had been a bucket list idea since the beginning our marriage; however, we were fully aware moving a cat, dog, and two children into roughly 200 square feet of space would come with serious challenges. We prepared for over a year to make this transition; downsizing all of our possessions, DIY construction projects on our trailer, and reading every blog/instruction guide that exists on the internet. Despite all our “preparation,” some things can’t be taught via a blog or YouTube; some things we had to learn the hard way. It’s been nearly six months since we’ve gone tiny, and our family has definitely learned and grown a lot. The one thing I have taken away from this experience, and effectively applied to my professional life, is the importance of organization.
When living in a trailer you have very limited storage options, therefore you must be extremely efficient and organized with your available space. You can play the perfect game of Tetris but it’s of no use whatsoever, because it’s not enough just to fit everything into the limited space. You have to consider the nature of your possessions and how you use them; how often will this item be needed? Is it within reach? Does this location make sense for its use? And, do other items need to be moved out of the way to access to it? This unique challenge got me thinking about how this new found skill could be useful outside of tiny-living.
The level of thought, forward planning, and practicality of effective organization is how businesses should treat their financial information. It’s not enough just to have all the data; you must have it organized in a manner that is both useful and efficient. Whether there is too much or too little information, unorganized data can lead to analysis paralysis; meaning the users of the information cannot easily decipher what the figures mean or how to use it.
The Tetris scenario I described would be the equivalent to having an abundance of information. The accounting team made sure to keep every single detail possible, however if the information is unorganized you’d have to constantly peel back layers of information and dig into endless reports just to reach any meaningful information. Forward planning is a key part to financial information organization. Whether it is specific sales reports, inventory values, profit margins, or departmental breakdowns, knowing what information management will need consistently will dictate what information needs to be readily available. To follow my tiny-living metaphor, this is the information stored in the most convenient and easily accessed cupboard (the items we need most often). There is also information we require on a more annual or circumstantial need, such as budgets, reports, or feasibility projects. The organization of this information must have had the planning and forethought to know what information would be beneficial in the future and how to record it effectively.
This last half year of tiny-living has taught me a lot about organization. I have made many mistakes along the way but quickly discovered which items I needed more readily available than others, which items I hardly used and could be hidden away for future use, as well as discovering what items I wish I had kept and not thrown out. Financial organization involves everything from updating the office file cabinet, cleaning the company hard drives, and knowing what information to save and how to “store” it. In a day and age where everything can be stored digitally, it’s easy to become hoarders of information; this necessitates the need for effective organization. Accurate information that can be quickly accessed is vital for management to make beneficial decisions for the company as a whole. It can prevent potential future losses, capitalize on advantageous opportunities, give clearer understanding of strengths and weaknesses, and increase efficiency overall. Maybe it’s time to do a self-assessment and see if your company’s information needs some organization; a season of “tiny-living.”
About the Author
Justin Webb is a consultant with Morrison, working primarily in our Business & Accounting Advisory practice. To get in touch with Justin, please find contact information for Morrison here.