The Importance of Your Financial Management Reports…
Understanding Your Monthly Management Reports – Preparation of monthly financial statements contributes greatly to the management of your business. Information provided in a monthly management report provides a useful summary of what’s going on in your business. It is the key to understand the performance, progress and productivity of your business.
However, understanding this information is usually underrated by owners themselves. They rather do something interesting prospectively: thinking about the future. As a result, they lose track of where they are in their own business and, most importantly, the cash flow of their business. Your chartered accountant can assist with this understanding.
Making Informed Decisions
I’m sure we would all like to make better, informed business decisions. And you can, especially if you know and understand what’s going on in your business. The key to this is the financial data captured in a monthly management report. Now to some, this may appear to be a bit boring. Nevertheless, the monthly management report is a great source of business intelligence, helping management to make more accurate, data-based decisions.
So, lets rip into a brief description of what you can expect to find in a monthly management report.
Are You Making or Losing Money?
The management report concentrates on measuring profit or loss. It facilitates the preparation of cash flow reporting and key performance indicators that enable meaningful management information for your business. The key components of the monthly management report are:
- Budget Variance Report
- Balance Sheet
- Aged Payables
- Aged Receivables
Cash is King as it keeps the business existing and developing. Budget variance report is one of the tools to manage the planned cash out of your business and actual cash out of your business. It gives you a clear picture of what you can afford to buy and what you have left.
Balance sheet gives a broad picture of what the business position is.
Aged receivables report shows you the amounts that are owed to your business by your customers. Similarly, an aged payable report shows the amount you owe to other companies for supplies, inventory and services your company receives.
Additional Information. The monthly management report may well include other financial and operational information, tailored to meet your decision-making requirements.
There you have it, in a Nutshell…
- If you have any queries on any aspect of the interpretation of your monthly management report and the associated financial statements, contact us.
- We provide monthly, two-monthly or quarterly management reports to support the management of your business, and increase your profitability.
- If you like the idea of having your monthly management reports prepared for you, contact us.
For a ‘No risk trial, No-cost, No-obligation Initial Consultation’, contact us today