The financial side of your business is complex and ever-evolving, and that’s why there are certain reports and checks you should be running through regularly. Procrastination and instant gratification tendencies tell us that we can always put it off until tomorrow, even when we know that’s not the best plan. Here are 3 financial reports your business should be running on a monthly basis.
Profit and Loss Statement
The profit and loss statement is often also referred to as the income statement and it is one of the most powerful reports you can compile month over month. It combines your income, revenue, and sales, and subtracts your expenses. Best practice includes using a rolling 12-month income statement to give you a better picture of how your company has been performing in the last year.
Tracking trends in your profit and loss statement is even more crucial with the current state of many businesses and industries being thrown into uncertain waters as a result of the coronavirus pandemic. Businesses across the world should be paying closer attention to their profits and losses, as a good number of them are much closer to permanently closing if something big disrupts their business or customer base.
Some key components to watch include margins, expenses as a percentage of sales and earnings (before interest), depreciation (where applicable), and taxes.
The financial big picture for your entire business is found in the balance sheet. While the profit and loss statement is all about the financial activity happening in your company, the balance sheet shows what you own, what you owe, and your equity (the difference between those two things).
Your accounts payable and accounts receivable are important indicators of financial trends on your balance sheet. And accounts receivable is something that needs to be checked often because you want to ensure your customer base has ample opportunities (through ACH and other methods) to pay you quickly and easily.
Cash Flow Statement
Cash flow is the lifeblood of your business. And the cash flow statement is the financial report that shows you how much cash was brought in and how it got used. It’s showing you where your dollars went throughout the month.
The cash flow statement also helps you better interpret your profit and loss (or income) statement because you can see where that cash ended up being used – including operating, investing, and financing activities.
For Help with Payments, Reports, and More – ReliaFund Is Here
All of these reports show the overall state of your business, but they say the devil is in the details. And if you aren’t creating and analyzing your payment reports with that same frequency, you could be missing some important insights.
We understand – no one wants to spend more time creating lengthy reports every day, week, or month. You want intuitive tools that can help do that data heavy lifting for you.
On-demand is the new standard, so why should your payment systems be any different? Run your business more effectively with real time reports and reconciliation from ReliaFund.
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Contact us to learn more.