Management & Financial Reporting
Timely and accurate reporting is key in any business no matter what its size. In most cases I find that business owners are not spending enough time reviewing how their business has progressed over the previous period as well as looking to the future.
Usually the problem lies with businesses having insufficient systems and processes in place in order to provide timely and accurate financial data on the position and performance of their business. When business owners know how their business is performing financially they have the opportunity to make decisions based on this real data.
Business owners should be reviewing their business’ financial data at least monthly in order to allow them to make quick proactive decisions. In order to make good decisions for the future of the business the data being reported needs to be timely and accurate. Decisions made from bad data will have significant negative affects on the business. Decisions made from accurate but untimely data are in most cases made too late.
Business owners cannot make confident decisions using poor financial data and reports. Financial reporting is vital for businesses because it allows business owners to:
- Understand what has happened in previous periods.
- Provide assistance when making future decisions.
- Have some visibility of the future and what proactive decisions need to be made.
For example you could have a monthly discussion around the following areas:
- Review the previous months Profit & Loss (P&L). How did we actually go?
- Review the P&L against budget / forecasts. Ahead, behind, positives, negatives.
- Review gross profit margins (GPM), individual expenses and net profit margin (NPM).
- Are there any obvious areas that stand out and need a deeper review?
- If behind sales / turnover targets what can we do over the coming months?
- If our margins are not where we expected what are driving these negative variances?
- Should we be looking to tighten our expenditure over the coming months to improve margins?
- Review the business' cash flow and profit and loss forecasts for the next quarter?
- Are our forecasts still realistic and achievable or do we need to review these?
- What are the business' key objectives over the coming months in order to be successful?
- Are there any areas within the business that are holding it back from being successful?
Having the right reporting systems in place allow businesses to make confident and effective decisions.
Let me work with you in improving your reporting process by:
- Providing accurate and timely monthly management reports.
- Providing an analysis of monthly management reports.
- Providing comparisons to previous periods, budgets and forecasts.
- Analysing gross profit margins and expenses.
- Providing reports on cash flow and debtor collection.
- Establishing reporting procedures in each department to increase visibility within the business.
- Analysis any trends within the business.
- Setting monthly targets and KPIs to monitor.
Peter has accredited partnerships with online cloud based systems XERO and Unleashed.
XERO is the emerging leader in online accounting software, providing business owners with real-time visibility of their financial position in a way that's simple, smart and secure.
Unleashed is a feature rich yet simple to use inventory management system and multi channel sales tool that helps you manage suppliers, purchases, shipments, consignment stock, locations, warehouses, production (BOM) and sales through multiple channels.