pWhether you’re making decisions about how much stock to order, what staff will be rostered on the weekend, what extra promotional activity should be undertaken or if you can afford to pay an employee more money, reporting plays a vital role in understanding the impact any choice has on the bottom line and your cash flow.
But which reports are most important?
In this blog post I’ve captured four reports I think are worth looking at. These are reports that any accounting software program is likely to be able to run.
Cash flow reports and forecasts
Managing cash flow effectively remains a significant hurdle for many small businesses in Australia. The cash flow forecast will compare the cash you have on hand, as well as money that should be paid to you, against the money you need to pay within the same period. For many smaller businesses having cash readily available is crucial to their success, therefore having a solid base for forecasting cash (i.e. reliable historical records as well as visibility of future transactions) can be extremely beneficial.
This is the statement of your business financial position at a point in time. The balance sheet will clearly show you assets versus your liabilities, in other words what you own and what you owe.
Profit and Loss
The Profit and Loss statement shows your business trading result over a specified period. It is most helpful to compare specific months, quarters or years against each other to get an overall picture of how the business is performing. If you find revenue is lower in the current quarter compared with the same time last year you will be able to pinpoint when the downward trend began and start to find out why.
Accounts receivable ageing summary & accounts payable ageing summary
While the cash flow forecast shows how much money is expected to come into the business, the accounts receivable ageing summary clearly shows which customers owe you money and how long these amounts have been outstanding.
Similarly, the accounts payable ageing summary complements the cash flow forecast by clearly showing to whom you owe money and how long these amounts have been outstanding.
Other reports you’ll find particularly useful include bank reconciliation, as well as top customer and top supplier reports.
Reporting can offer you incredible insights into cash flow, the future success of your business, customer buying habits and more. You’ll find all of these reports available in most accounting software programs, including Reckon Accounts Hosted. Consider how the insights can better inform your sales and marketing activity.
How critical is reporting to your business success? What reports do you find most useful?