Essential Monthly Bookkeeping Reports for Business Success

Overseeing the financial health of your business can often feel overwhelming. However, making time each month to review critical bookkeeping reports can be a game-changer. Not only do these reports help catch potential problems early, but they also reveal growth opportunities, supporting better decision-making.

Income Statement (Profit and Loss Statement)

The Income Statement provides a summary of your company's income and expenses over a specific time. It plays a crucial role in revealing profitability, cost control, and assisting in budgeting and investment decisions. Be cautious of issues like decreasing profit margins, a sudden unexplained rise in operating expenses, or losses despite steady sales, which might be due to underpricing or high overhead.

Balance Sheet

A Balance Sheet is a snapshot of your business's assets, liabilities, and equity, helping you assess stability and make informed choices about growth or risk. Look out for red flags such as a shrinking cash balance with unclear causes, rising debt without matching income growth, or negative or shrinking owner equity.

Accounts Receivable Aging Report

This report breaks down unpaid invoices by the duration they've been outstanding, supporting healthy cash flow by highlighting payment delays. Watch for an increasing number of late payments in the 60–90+ day range or a heavy reliance on a single customer with overdue invoices.

It's vital for business owners to consistently review these reports to take charge of their company's financial health. By acting early on red flags and recognizing trends, you'll ensure your business remains on a growth trajectory. If you have any questions about bookkeeping or payroll, feel free to reach out to our firm for help and guidance.