Top Financial Reports Every Business Owner Should Review Monthly
Here’s a list of Top Financial Reports Every Business Owner Should Review Monthly, along with a brief explanation of each. These reports help maintain financial health, support decision-making, and ensure long-term success:
PROFIT AND LOSS STATEMENT (INCOME STATEMENT)
Purpose: Shows revenues, costs, and expenses over a specific period.
Why it matters: Helps you understand profitability and monitor operational efficiency.
Key metrics: Net income, gross profit margin, operating expenses.
BALANCE SHEET
Purpose: Provides a snapshot of your business’s financial position at a specific point in time.
Why it matters: Helps assess assets, liabilities, and equity.
Key metrics: Liquidity, solvency, and overall financial stability.
CASH FLOW STATEMENT
Purpose: Tracks the flow of cash in and out of your business.
Why it matters: Ensures you have enough cash to cover expenses and invest in growth.
Key metrics: Operating, investing, and financing activities.
ACCOUNTS RECEIVABLE AGING REPORT
Purpose: Lists outstanding customer invoices and how long they’ve been unpaid.
Why it matters: Helps manage collections and improves cash flow.
Key metrics: Overdue accounts that may require follow-up or escalation.
ACCOUNTS PAYABLE AGING REPORT
Purpose: Shows what you owe to vendors and when payments are due.
Why it matters: Helps avoid late fees and maintain good supplier relationships.
Key metrics: Bills nearing or past due.
BUDGET VS. ACTUAL REPORT
Purpose: Compares projected income and expenses to actual results.
Why it matters: Highlights variances so you can adjust strategy or spending.
Key metrics: Over- or under-performing areas of your business.
SALES REPORT
Purpose: Summarizes revenue generated from product or service sales.
Why it matters: Tracks business growth and identifies trends or seasonal shifts.
Key metrics: Forecasting, inventory planning, and marketing evaluation.
INVENTORY REPORT (IF APPLICABLE)
Purpose: Detail quantity and value of stock on hand.
Why it matters: Ensures proper stock levels and reduces carrying costs.
Key metrics: Fast-moving vs. slow-moving items.