Your Accountant Can Send You 30 Reports. These Are the Three You Actually Need Each Month.
Accounting software can produce dozens of reports. Most owners respond in one of two ways: they read none of them, or they open a few, feel overwhelmed and close the tab. A short monthly routine built around three reports will tell you more than either approach.
1. Profit and Loss
It answers: Did we make money this month, and where did it come from?
What to look for:
- Margin, not just revenue. Is the percentage of each sales dollar you keep holding steady?
- Costs that moved. Any category that jumped compared to the previous month or the same month last year.
- Anything unexpected sitting in a catch-all category.
2. Cash Flow or Bank Position
It answers: Do we have enough money, and where is it going?
What to look for:
- The actual bank balance against what you will owe in the next few weeks: wages, GST, super, suppliers.
- The gap between profit and cash. If profit is healthy but cash is falling, something is tying money up.
- Money set aside for tax obligations, so it is not treated as spendable.
3. Aged Receivables
It answers: Who owes us money, and for how long?
What to look for:
- Invoices older than your payment terms.
- One client making up a large share of what is outstanding.
- A growing 60 and 90 day column, which is usually the earliest warning of a cash problem.
A Fifteen-Minute Routine
- Pick a day each month, shortly after the books are reconciled.
- Read the three reports in order.
- Write down one question or action from each, and send the questions to your accountant.
RBizz prepares these reports and walks owners through what they mean each month. Get in touch if your reports arrive but nobody explains them.
