Trust Your Gut
Do you find yourself looking at your monthly reports and just saying something looks off, or there’s no way I did that little in revenue, or seeing an expense bucket that looks too high? When it comes to your business you should have a feel for where your money is going or what your revenue should be. When you feel something looks off, what now? How do you go deeper to verify your hunch or verify the numbers?
Time To Dig Deeper
When you don’t have confidence in your numbers at the end of the month, it’s time to investigate to get further detail in what you are seeing. One of the best reports to pull when trying to look for patterns, or that will really call out some potential discrepancies, is a Profit and Loss by month. This report will give you the ability to compare each account month over month. From here you can look for patterns. Do you see your monthly charges for things like rent, utilities, telephone and internet bills month over month? Use this report to compare revenue and cost of goods numbers and see if you see any significant differences and dig into it if it seems off. Another report that is important to stay on top of is your Account Receivable report. Your AR is what will affect your cash flow and staying in the know on who owes you and how much is necessary for your business.
Good Processes
When you have good bookkeeping processes in place in your business, you should find your reporting more reliable. Putting good systems in place for job costing all of your cost of goods transactions so you don’t have any that slip through the cracks is crucial. One reason you may not feel like you can trust your reports is a lack of confidence in the system and people putting information into those reports. Sit down with your team and decide who is responsible for what pieces of the AR process and AP process. Sometimes just knowing that there is a system in place and people are catching all the pieces can give you the piece of mind. Also, implement a month end process and checklist that ensures that accounts have been reconciled and all your numbers properly tied out will ensure accurate reporting.
Stay On Top Of Your Reports
The only way to get a grip on your reports and numbers is to look at those reports on a regular basis. Pull them weekly, or set it up so QuickBooks automatically emails them to you on a scheduled basis. Knowing how much money is in your bank account is one thing, but knowing how much money your business did in revenue, or what your overhead cost to run your business is another. There is so much power in knowledge and staying in the know when it comes to your numbers is the key to not only growing your business but being able to make decisions that are best for your company.
