Many small business owners get so busy working on other things that they never look at their numbers.
That’s why building a monthly reporting package is such a useful idea. Instead of running your business based on hunches or looking at your numbers “every once in a while,” you can create a set of key financial reports that get automatically generated and delivered to your inbox every month.
What reports should you have in your monthly package?
The starting point will be your Balance Sheet and Profit and Loss (P&L). These are the two primary financial reports for any business, whether you’re Amazon or Dancing Turtle Yoga Studios, and they’ll be the foundation of your monthly reporting package.
From there, the general idea is to add supporting reports that focus on specific accounts and key areas of the business you want to keep a close eye on. Popular examples include: accounts receivable aging (a summary of unpaid invoices/who owes you money), sales performance reports (including sales results by product/customer/region), accounts payable summary (a list of your unpaid bills and when they’re due), and inventory valuation summary (which shows your inventory quantities on hand and their total value). In addition, you can create snapshot reports for any expense accounts you want to track individually such as advertising/marketing, outside services, payroll, travel, etc.
If you’re just getting started, we’d suggest that you use the above ideas as a framework, and then start customizing your package from there. It does take some trial and error to figure out which reports you really need, but once you get a regular monthly routine in place, the job of "staying on top your numbers" becomes a whole lot easier and less time-consuming.