Monthly Financial Reporting and Why It Matters

Monthly financial reporting seems, to most businesses, like a major nuisance. After all, reporting this often takes time and money, at least if you pay someone to do it for you. Though monthly financial reporting can certainly be a bit of a pain, it’s definitely worth it.

 When you’re checking into your finances regularly, you can catch any minor problems before they have time to turn into major ones.  Plus, if you’re using online accounting software or have a good accountant, it doesn’t have to take up too much of your time.    

Even if you’re not quite ready to commit to a full-on, completely thorough monthly financial reporting schedule, the very least you can do is to pay attention to a few key matters on a monthly basis.

Accounts Receivables Aging

One thing you’ll definitely want to pay attention to on at least a monthly basis is accounts receivable aging. This will let you know how many of your customers have outstanding balances, or, in other words, owe you money!

With accounting software, you can easily generate a report on who owes you money and then separate it by date, project, and other factors. This makes it easy to step up collection efforts, send collection notices, and, most importantly of all, get the money you are owed.

The Budget-Spending Balance

Smart businesses don’t just spend and earn without thinking about it. No, smart businesses have a strict budget that they try their best to stick to. However, “trying your best” isn’t really enough; you need to be keeping careful track of your budget vs. your spending, and this is definitely one of those things you should be tracking on at least a monthly basis.

When you calculate budget vs. spending each month, you’ll be able to see any areas where you are spending too much and need to cut back, as well as any areas where you could afford to spend a bit more if needed. Staying on top of the “budget-spending balance” will help you to keep your business in good financial shape.

Outstanding Accounts Payable

Unfortunately, earning money isn’t the only part of running a business. You also have to spend money, and as such, you need to be keeping careful track of how many invoices you need to pay and when they’re due.

Since most bills only come due once a month, checking in to ensure you’re paying everything on or preferably before the due date is the smartest way to avoid late fees, fines, and other hassles. Plus, after you’ve been monitoring these amounts for a while, you’ll be able to tell where you’re spending the most money, how you can cut back, and other important details that can help your business to function more efficiently.

As you can see, when it comes to financial matters, some things just can’t wait. Get your financial priorities in order and make sure you’re tracking these and other important finances on at least a monthly basis.