You want your company to succeed. How do you do that?

Reports allow you see how well a company is doing financially. Reports show how your money flows in and out of your business. A report’s complexity can range vastly, depending on the user’s needs.

Some reports can be super simple. A bank statement, for example, starts with a beginning balance, adds and subtracts transactions, and ends with a current balance. Easy, right?

Some reports can be very complicated and full of details. Consider a large grocery chain store, for example. Each store has X amount of registers, computing Y amount of transactions per day. This data cane be further detailed to comparing time periods within a day, and down to the hour.

Why are reports so important?

Reports compile data in a way that provides users with insights as to how the business is doing overall. This helps the users to see if the business is successful or if it needs to make adjustments. Consider the grocery store example from before. One adjustment might be to add an additional cashier during a specific time period. Another adjustment might be to retire a specific product or invest in a new variation of a product.

In my experience, the higher the level of management, the less complicated the report needs to be. Upper management generally will look at the overall data, and can determine the company’s level of success. The phrase “bottom line” comes to mind. Managers can always request more detailed reports if needed. Lower level management usually work more closely with the data, and often makes adjustments prior to upper level management seeing the end results.

How do you know which reports will show what you need?

There are three main reports that all companies will use: profit and loss, balance sheet, and a cash flow statement. Most software options are able to produce these financial statements. These three reports are usually all most managers need to get a clear picture of the company’s financial well-being. According to this article, there are two more options to consider as well: Accounts Receivable Aging and Budget vs. Actual.

In conclusion, there are are many reports available. There are only a few that show the best analysis of a company’s financial health. If these reports do not show the information in a way you would like, you can always customize them. You can even view the data in graph or table form (who doesn’t love a good pie chart?). If you have any specific questions regarding the information in this post, please feel free to reach out and Contact Me. Thank you!