Business owners often get so busy that they spend little or no time on important accounting and financial management tasks.
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 tell you how the business is performing and get automatically delivered to your inbox every month.
“That sounds great, but what reports should I have in my monthly package?”
We’re glad you asked. The foundation 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 staples of your monthly reporting package.
From there, the basic idea is to add supporting reports that focus on specific accounts or key areas of the business you want to keep an eye on. If you use QBO like we do, here are a few popular reports that might be useful:
Accounts Receivable Aging Report: a summary of unpaid invoices/how much customers owe you
Accounts Payable Summary Report: a list of your unpaid bills and when they’re due
Sales by Customer Summary: an overview of all your customers and how much they’ve bought from you (it’s always interesting to see who your biggest customers are)
Sales by Product/Service Summary: shows your total sales for each product or service, including the percentage of sales (ditto, this report is always fascinating to look at)
Inventory Valuation Summary: an overview of your inventory quantities on hand and their total value (if you have an inventory-based business, you will become closely acquainted with this report)
Expenses by Vendor Summary: a summary of how much money you spent last month, organized by vendor
Payroll Summary by Employee: a complete report of wages and payroll taxes paid by employee (if payroll is one of your biggest monthly expenses, you should be looking at this report — or something comparable — on a regular basis)
If you’re just starting out, you can use the above ideas as a framework and then start developing your package from there. It does take some trial and error to figure out which reports you really need (and which ones you don’t). But once you get a regular monthly routine in place, the job of "staying on top your numbers" becomes a lot easier and less time-consuming.