5 Reports Every Business Should Review

Whether you’re running a small cafe or a giant company, all business owners should know that financial reports are your very best friend. And not like a frien-emy you pretend to like. They are someone you like-like.

There are a handful of reports that are absolute must-haves, and I’m going to break down which ones you should cozy up with - and why.

1. The Profit and Loss Statement (P&L)

Think of the P&L statement like a fitness tracker for your business. It tells you how much money you’re making and how much you’re spending. It covers a specific period, showing your revenues, expenses, and, ultimately, your profit or loss. Regularly checking this report helps you understand your profitability and spot trends like your Fitbit will help you track those 10,000 steps. 

Maybe it’s time to cut back on those expensive office plants, or perhaps you're ready to splurge on a new coffee machine for the team. This report will tell you when it is time for both of these situations.

2. The Balance Sheet

The balance sheet is like your business’s yearbook photo. It captures your financial position at a specific point in time. It lists your assets (what you own), liabilities (what you owe), and equity (the net worth of your business). This report is crucial because it helps you see if you’re financially balanced or if you’re one overdue invoice away from a meltdown. And just like that photo when you had braces, you may not like every picture you get, but it will be an accurate reflection of that time period.

3. Cash Flow Statement

Cash is king, queen, and the entire court of business. The cash flow statement shows how cash moves in and out of your business. It’s divided into operating, investing, and financing activities. Keeping an eye on this report ensures you always have enough cash to keep the lights on and pay your employees. And just like the court jester, any weird moves with your money can be expelled from the next party if you don’t like what it showed you.

4. Accounts Receivable Aging Report

This report is your personal detective for tracking down who owes you money and for how long. It lists unpaid customer invoices and their due dates. Regularly reviewing this report can help you chase down late payments before they become a lost cause. After all, you’ve got bills to pay too, right? We hope you don’t have to put on a trenchcoat and break out a magnifying glass to find your money, but if so, use this report as your casefile like the good inspector would.

5. Accounts Payable Aging Report

On the flip side, the accounts payable aging report keeps tabs on what you owe and when. It’s like having a personal assistant reminding you of your upcoming financial obligations. Staying on top of this report helps you manage your cash flow better and avoid those pesky late fees.

To recap…

Bookkeeping reports might not be the stuff of major motion pictures, but they’re the unsung heroes of successful businesses.

By regularly reviewing these reports you’ll make informed decisions, avoid mishaps, and maybe even find some extra cash in the budget.