For many business owners, financial reporting happens once a year when the annual accounts are prepared. By then, you’re looking backwards at what happened months ago.
Monthly reporting gives you a much more current picture of how your business is performing.
Regular reports can help you keep an eye on:
Revenue: Are sales where you expected them to be?
Gross profit: Are your margins holding up, or are increasing costs starting to affect profitability?
Overheads: Are expenses increasing faster than revenue?
Net profit: Is the business actually making the return you expect?
Cash flow: Do you have enough cash available to meet upcoming commitments?
Debtors: Are customers paying you on time?
Tax: Are you setting aside enough for GST, provisional tax and other tax obligations?
But the real value isn’t simply having the reports. It’s understanding what the numbers are telling you. Having someone review the numbers with you gives you a second set of eyes and helps identify what may need attention.
Be proactive, not reactive
Monthly reporting gives you time to act.
If profits are higher than expected, we can look at what that means for your tax position and whether any planning should be done.
If performance is below expectations, there is still time to understand why and make changes.
It also gives you better information when making decisions about things such as employing staff, purchasing equipment, taking on finance or growing the business.
Your annual accounts tell you where you’ve been. Monthly reporting helps you understand where you are now and plan where you’re going next.
If you would like to discuss whether monthly reporting could benefit your business, get in touch with us. We can tailor the reporting to focus on the information that is most useful to you.
