In the whirlwind of managing a business, understanding the data that measures business performance becomes another vital task. While your instincts about the state of your business may be strong, having key metrics at your fingertips can not only save you time but provide insights for better decision-making. Explore these five impactful reports and discover how they can elevate your business performance.
Track income and expenses with the Profit and Loss report The Profit and Loss report, often referred to as P&L, succinctly summarises your business's financial activities over a specified time period. It lays out your business's income, including any other sources such as bank interest, and subtracts its expenses.
Aside from the in-depth Profit and Loss report of our accounting software (FREE when you become a client), a snapshot view on the Overview screen quickly informs you if your business's earnings surpass its operating expenses—in other words, if your business is profitable or running at a loss.
Maintain financial wellness with the Balance Sheet report The Balance Sheet report is your window into your company's overall financial status. It reveals all that your business owns (categorised into current and fixed assets) and all its liabilities (sorted into current and long-term), at a certain point in time.
Though the volume of numbers might seem intimidating initially, the report is quite straightforward. Taxflow manages all the double entry bookkeeping for you, provided you've entered all data accurately throughout the year, ensuring your Balance Sheet always aligns.
If the assets to liabilities ratio drops below 1:1, take it as an indication to review your business's financial health. No need for panic—rather, strategise ways to better your financial position. Like all reports, the Balance Sheet can point out both potential issues and opportunities.
Monitor outstanding invoices with the Aged Debtors report The Aged Debtors report, while sounding a bit complex, is an uncomplicated way to keep an eye on unpaid invoices and spot chronic late payers. The report lists all your customers, invoice-wise, who still owe you, showing how much and for how long they've been due.
To ease your workload, consider setting up automatic emails in your accounting software to remind your customers about impending or overdue payments.
Identify your best (and worst) customers with the Customer Sales report The Customer Sales report details the income you've received from each of your customers over time. You can review the report by month for fine details, or by year for an overarching view, and arrange it in ascending or descending order. This report, coupled with the Aged Debtors report, can help you discern your most profitable customers and those late payers to steer clear of!
Control your expenses with the Spending Categories report Keeping track of your business expenditures can be challenging. The Spending Categories report breaks down your spending on bills, expenses, and bank transactions by category. This categorisation of outgoings lets you easily observe your expenditure pattern, guiding you towards judicious financial decisions like reducing unnecessary costs.
To learn more about business performance measurement and key financial and non-financial metrics to monitor, delve into our Startup Toolkit guide on measuring your small business's performance.
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