Four Key Reports Every Business Needs

By Angela Turton

I love looking at reports, spreadsheets and forecasts though not everyone does. Business finances can be daunting for many business owners and they can be difficult to get their head around.

With my experience as an accountant and a business coach, I always help business owners to look at things in a different way and the same applies to the financial aspect of their business. Here’s my version of explaining the four key reports that every business needs:

You need reports that look to the past – they say “what has happened in my business?” and the first one of these is the Profit and Loss Account.

The Profit and Loss Account is a detailed look at the things your business has earned or spent in the period under consideration. You will need to include things that you have committed to but have not yet paid for.

There is also the Balance Sheet. This is a measure of exactly what the worth of your business is at any one date or point in time, typically the end of the month. It includes who owes you money, whom you owe money to, and where the cash is hiding in your business.

If you have a computerised accounting package these reports will be readily available to you. When you run them, take a moment to ask what your business is trying to tell you. If you don’t understand, or it doesn’t feel right, talk to your bookkeeper or accountant, or come and speak to me.

You also need reports that look to the future, which ask “what will happen in my business”?

The first is the Budget Report. This will show you how you expect to make money in the next few months or years, and how much you will have to invest to get that level of income.

The second is a Cashflow Report. This basically follows the money. What will you spend when and when will you get paid by your customers, what do you need to borrow and when will you repay that etc.

These reports are more difficult to prepare because there is an aspect of crystal ball gazing going on.

I am a qualified accountant and have helped many businesses understand their numbers and their important metrics. If you would like my help, book a virtual meeting with me here.