I have been using a monthly reporting package since my first company I started when I
was in college. There wasn’t much to
report, but it helped keep us 2 owners focused, on track, and profitable. The month-end summary transitioned over the years from balance sheet and P&L to charts and graphs and mobile dashboards.
Working with companies of all types and sizes in every industry, the value of
the month-end reporting package can be immeasurable.
It
helps keep small business owners focused, accountable, and profitable. In larger companies, it helps keeps teams aligned,
engaged, and driven.
Some
small business owners I work with are secretive with financial information. They don’t want their team to know how well
or poorly they’re doing. I think that's a mistake, but it's their business. To me, open book financial reporting makes
sense. Either way,
the smaller business owner needs to see the information for themselves.
I
also like a daily flash report and weekly dashboard. It’s interesting how dashboards can now easily
integrate into your data – producing great information on a real-time
basis. More about dashboards later.
Everyone’s
month-end package is different. Keep it simple and readable. Too
much detail on the income statement, for example, is not helpful. 80/20 your thinking.
Here’s a quick checklist to help improve yours:
q Cover page
q Strategic one page
summary – vision, strategic sentence, quarterly goals, etc.
q CEO, CFO, Sales reports,
if applicable
q Income statement –
comparing summary P&L month-to-date and year-to-date to the previous
year and to your plan.
q Balance Sheet –
compare to prior year
q Historical graphs (a
picture is a thousand words): segment sales, cost of goods sold, gross profit,
top few expense lines, net income.
q Top 20 customers’
month-to-date and year-to-date Sales, GP$, GP%; Sales Analysis; Geography
q Top Vendors month-to-date
and year-to-date purchases; Top 20 A/P balances
q Top expense line
items with flux comments
q KPI data and graphs
(company specific; sales, gross profit, new customers, lost customers, ASP,
revenue/mile, revenue/visit, etc.)
q Cash flow driver
graphs – A/R days, WIP, Inventory days, A/P days; Financial ratios
q A/R Aging for the
month and historical
q Departmental
summaries, if applicable
q Top 3 priorities from
prior month - status
q Subsequent month top
3 priorities
Use the month-end reporting package as an opportunity to really step up your
financial close process with accurate and timely final numbers.
Again,
the reporting package is always company specific, but is a huge opportunity to
improve communication and get financial accountability and growth; and better
profit and cash flow.
If you need any help developing your monthly financial package, let me know.
In good health and profit,
/jon
