Producing useful reports

What information does your finance team produce? Do you ever look at it? If not, you are not alone.
 

I have come across many businesses that do not use the financial information that is generated by their systems and people. I’ve seen monthly reports running to hundreds of pages to one age profit and loss accounts that just don’t reflect the true performance of the business.

• One to three pages should be sufficient for most businesses.
• A summary of your profit and loss for the last month and year-to-date results.
• A summary balance sheet showing you your assets and liabilities.
• A cash flow forecast forecasting cash flow over 3 to 12 months.
• The Key Performance Indicators that matter to you.
• A narrative explaining the financial trading and health of the business.

Most small business owners don’t rely on their accountants to run their businesses. They understand what makes their businesses tick and keep a close eye on these Key Performance Indicators (‘KPIs’). Well, they do until the business grows in size and complexity.

KPIs can be both financial and non-financial. They can mean the gross profit margin of the whole business or the margin you are making on individual jobs, the latter being far more valuable to you. But, there are so many more potential KPIs that you will want to measure.
 

See if any of the ones on this list would help you run your business better.  

•  Average order value per customer
•  Acquisition cost per customer
•  Customer acquisition rate
•  Profitability per job
•  Client profitability
•  Client retention rates
•  Stock losses or wastage
•  Stock age
•  Outstanding debtor days
•  Outstanding retentions
•  After-sales costs
•  Warranty costs
•  Staff utilisation
•  Operating profit per head
•  Customer service calls
•  Service response time  

If you would like to improve your reporting so that you get the information you need to run your business....