Most business owners are so busy doing other things that accounting and financial tasks often get pushed to the bottom of their to-do list.
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 reports that get automatically generated every month. For businesses that don’t have an Accounting Manager or Controller, this is a great way to start professionalizing your financial management.
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.
From there, the basic idea is to add supporting reports that drill down on specific accounts and key areas of the business you're interested in. Typical examples include: accounts receivable (A/R), accounts payable (A/P), inventory, sales trends, cost of goods sold (COGS), and any expense accounts you want to keep a close eye on (advertising, payroll, travel expenses, etc.).
Overall, we’d suggest that you begin with a few of the areas mentioned above, then start customizing your monthly package from there. It does take some trial and error to figure out which reports you really need, but once you get a regular package in place, the job of "staying on top your numbers" becomes a lot easier and less time-consuming.