The Importance of Month-End Reporting

 

The end-of-month bookkeeping tasks and procedures are a necessity for every small business.  Although some business owners might not see them as essential and could choose to do them on a quarterly basis, doing them at the end of the month is the preferred way.  At the end of the month, going through the motions and reviewing all of the financial records will help keep the business on track, so they know where they stand at the beginning of the next month.

 

Month-end reporting can be done with a software tool but having the care and attention to detail of a professional bookkeeper is optimal.  Bookkeepers are highly-trained and experienced and can get the job done while business owners focus on more important things.

 

Here are a few reasons why month-end reporting is crucial to any small business:

 

Make Better Decisions

 

As Justin Johnson points out: “The monthly accounting and bookkeeping closing process is important because it provides management with vital financial information.”  When you follow a proper month-end reporting procedure, the decision-makers in your company will be able to stay in the know.  If they have a firm understanding of the company’s financial health, they can make better decisions moving forward at the beginning of a new month.  If they didn’t have this information, they could make potentially costly mistakes.

 

A Moment for Review

 

Everyone can get caught up in the day to day activities of a business and inevitably finances take a backseat.  With a month-end financial reporting system, it gives everyone a chance to pause and reflect on the previous month.  How well did the company do financially?  What did you do differently?  What can you do differently in the next month?  These are questions that small business owners can ask themselves to help them adapt their plan moving forward.

 

Manage Inventory

 

As with many other things checked during the month-end reporting process, reviewing the inventory levels is vital to a company’s success.  At the end of the month, the bookkeeper can review and check to see which products are in stock and which products aren’t.  This helps the business plan for the next month and determines which items they’re selling more of.

 

Bank Reconciliations

 

Bank reconciliations are crucial to ensure that there aren’t any unusual transactions on your business bank statements.  This is an important step and waiting for this all at the end of the year makes the process incredibly tedious.  Doing it on a monthly basis ensures everything is correct throughout the year to avoid any surprises.

 

Accounts Payable and Accounts Receivable

 

Who owes you money and who do you owe money to?  During this step of the month-end reporting process, the bookkeeper will assess invoices and check for any past due notices that should be collected.  It’s important to stay on top of both of these tasks; otherwise, it can be incredibly confusing at the end of the year.  Also, if you don’t actively check and assess your company’s accounts payable, you could be in danger of missing a payment.

 

You Don’t Have to Do It Yourself

 

While you may want to stay in charge of every area of your business, there is no shame in getting help.  ABJ Business Solutions are the professional bookkeepers you need to make your month-end reporting a breeze.  Get in touch with us today to learn more!