How often do you review your financials? Be honest…reviewing your financials, whether it be for a department, small business or 1,000-person firm, is critical to your success. And if you aren’t planning your financial reports and knowing what to do with them, you’re setting yourself up for embarrassment and ultimate failure.

The topics of financial finance, accounting and their applicable laws are too complex and lengthy to cover in a simple blog. But I hope, after reading this, you’ll be more interested and concerned with how you’re receiving financial reports and how they’re being used across your company.

First, Get A Professional:

My advice has always been that every organization needs to have a bookkeeper for their organization. I understand that not everyone can afford a full-time accountant. (If you can, good for you. You still need to read this part). If you’re strapped for cash, at the very least, you need to hire a very part time bookkeeper who will come into your business, do a few things and leave.

Tip: These people (part-time bookkeepers) are relatively easy to find. Many of them act as contract employees and have their own client list. They may seem a little high-priced for hourly work (mainly due to insurances and taxes they have to cover). But the savings and value they offer you, in terms of extra time and eliminating costly amature errors, is worth it.

Plan Your Reports:

Every business needs different types of information at particular times. So, I can’t define, exactly, what you need. But I can come close. One thing I know for sure is, you need to plan for how you are going to receive reports. These reports should be preplanned and in the format you prefer the most.

Side Note: You’d be surprised at what financial software can produce. If you don’t know exactly what you need, describe what you think you’ll need. An experienced bookkeeper should be able to give you just the right thing.

Weekly Reports:

These reports are what you use when you need to be nimble and make smart, fast decisions. It might help to think of a Knight, in the thick of battle, is in danger of being struck by an enemy. To survive, he needs to be able to react and block the coming blow. The same is with a weekly report. It is what you use to react to volatile forces in the market. That’s why it’s important to include measurements of things that are within your immediate control (like Accounts Receivable, Accounts Payable, Weekly Sales…).Don’t be blindsided when you could have stood your ground.

Monthly Reports:

Monthly reports are always a little trickier. By their nature, they are more strategic and should be used in planning bigger aspects of your business. You could use these reports to “tweak” a marking strategy, change suppliers or change a business process.

Quarterly Reports:

Quarterly reports make big news. They are the official score board of a company’s performance and usually mark the beginning of a new market cycle. Because of the breath of a quarterly report, they can be used in a variety of ways. However, I’m only going to suggest two.

• First, Quarterly reports should be viewed as a historical data tool. You can use it to plan next year’s product line, market campaign and staffing levels.
• Second, you should use it to measure how far you are from your goals. The gap can be so big that you start looking at your business in a different way. Decisions that focus on the bigger and more long-term goals of the company are usually made during the review of quarterly reports.

Yearly Reports:

Depending on how you look at it, yearly reports can be the time you celebrate or think of how things are “renewed” by the New Year. Yearly reports are a reflection of the decisions and decision makers of that year. It marks next phases, transitions, new visions and are usually used to motivate employees and vendors to change things up. Everything should be included in yearly reports. You need to get the entire picture here.

Final words on financial reporting:

With many small business owners, financial reporting is an emotionally disturbing experience. Even if the reports are good, they are still disturbing. That’s because financial reports bring you down to reality. It clearly, in black and white, lays everything out there. All the little areas you thought you were getting away with cannot be hidden…and it hurts.

The best tip to get you moving is to view these reports as tools you use to move into the future. They are not emotional attacks on your character…they are the periscope you use to get a look around and move forward. And the more time you spend looking through it, the better chance you have of navigating through these rough waters we call the modern market.