Financial Analysis Principles Applied Monthly

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Financial Analysis Principles Applied Monthly

In my previous two blog’s I introduced the principles of daily and weekly reporting and analysis, in which I described reports as the tools that allow you to understand and monitor your ‘business heartbeat’. This blog, the last in my series of three, focusses on monthly reports.

If you have reviewed and analysed the daily and weekly reports, then month end reporting is simply a formality. This is the time to reflect on how profitable the month has been and how productive the staff were – your monthly business ‘check up’.

Generally speaking, month end reports consist of:
• Trial Balance (12 month comparison)
• Aged Debtors
• Aged Creditors
• Top 100 client summary
• Profit and Loss
• Balance Sheet

These reports should be discussed with your employees and presented at each month’s Board Meeting, with goals and objectives being set in order to improve the results. The quantified improvement or deterioration of these measures must be discussed and attended to.

The reports and process I have discussed are only examples. When implementing your ERP solution, a good business partner will assist with not only the software, but also with making changes and improvements to your business culture through the proper use of your new software solution.

We often forget to apply the basics, so I hope this series of blogs has come as a useful reminder about the importance of reporting and analysis for your business and I encourage you to apply the principles that you have read about. From experience, even the simple, basic reports do make a difference.

To gain the greatest possible benefit from your reports my advice is – Read it, read it again, then take appropriate action.

Steven Kühn
Sage 200 Product Manager

Customer Success

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