What are the most important reports for your company to concentrate on? This blog post offers advice on how to monitor performance, take action, and set up your firm to survive the new normal in business.

It has never been more crucial for company owners to have a firm grasp of their finances.

Priorities have changed, consumer behaviour has changed, and revenue streams have had to change and pivot for many businesses in order to develop a workable business strategy.

In this new business environment, it's more crucial than ever to be in control of your key financial reports and metrics in order to track, monitor, and drive your financial success.

Understanding your financial records

Extra funds in the company may have previously been considered an excess that needed to be used for something. These reserves are crucial for the survival and long-term health of companies, as recent years have demonstrated.

To truly be in charge of this "cash", it's crucial that you can dip into your accounts, financial reports and dashboards and 'see the genuine story' behind your financial position. So, which major stories should you pay attention to? Let's look at this:

Budget
The financial strategy that is connected to your strategic plan is your budget. The budget is essentially an estimate of the amount of money needed to achieve your main strategic objectives as well as the revenue (income) and profits you anticipate generating during this time. It serves as a standard against which you can compare your actuals (historical figures), enabling you to identify variances, gaps, and missed goals over time.

Cashflow Report
A cashflow summary displays the money coming into and going out of your company. You can control this ongoing process and strive for a "positive cashflow situation" in which inflows outweigh outflows by thoroughly understanding these cash inflows and outflows. In this ideal situation, you have enough readily available capital in the company to pay your bills, support operations, and make a profit.

Cash Flow Prediction
You can predict your historical cash flow figures into the future using forecasting. As a result, you can anticipate the cash flow gaps weeks or months in advance. This provides you the opportunity to take action, such as growing your revenue stream, cutting your underlying expenses, pursuing unpaid invoices (aged debt), or approaching lenders for additional funding.

Account Statement
You can see the company's assets, liabilities, and equity on the balance sheet at any particular time. In essence, it's a snapshot of what the business possesses (your assets), what you owe to others (your liabilities), and how much cash and profits you have presently invested in the business (your equity). When making important business decisions, it's incredibly helpful to have access to information like the stock and equipment the company owns, the amount of debt (liabilities) you've accrued, and the company's real value.

Gains & Losses
Your profit and loss report (P&L) provides you a summary of the company's earnings, costs, and expenses over a specified historical time period. Your P&L is more like a moving video than your balance statement, which is just a snapshot. By displaying how income is coming in and costs/expenses are going out, it helps you see how your finances are doing (rather than cash coming in and going out, as you see in your cashflow statement and cashflow forecasts).

Contact us right away if you need assistance comprehending your numbers and determining which crucial numbers you should pay attention to in your company.