For any business, no matter their size or industry, financial reporting is a crucial component of their strategy. Without it, you’d have no idea where your business stands; if you’re losing money every month, or if you’re ready to take the next step.
Even more important than just reporting your financial status, is doing it on a regular basis. Here are a few reasons why it is crucial.
Know Where You Stand
The most important benefit of regular reporting is that it shows you where your business stands. If you were just to have scattered financial documents, you wouldn’t be able to see the pattern and see the bigger picture of your business’ finances. Also, you wouldn’t have the timely data required to be able to make informed decisions as and when required.
Regular Reporting Tracks Progress
Once you set up a regular reporting strategy, you’ll be able to track your organisation’s progress over time. The old saying goes “what gets measured gets managed” and this phrase is just as true when it comes to small business performance.
Each reporting period, you should be able to determine your strategy moving forward. Remember, your finances should play a role in every decision you make including whether you can afford that marketing budget, whether you need to push new products, whether it’s time to hire new staff etc.
Create a Paper Trail
Regular reporting will create a paper trail for your business and if you report your business finances on a regular basis, you’ll have a complete financial history for the company without any gaps. This will become especially useful should your company ever be audited, or if you apply for a loan or if you plan to sell the business. The more that people can learn about your business, the better in these situations.
In the old days this would mean storing paper documents in filing cabinets but in the digital age, you can save, backup and store your business reports for years without using much time or resources.
Let Us Help
ABJ Business Solutions will help you get your reporting strategy back on track. Get in touch with us today and we’ll help you come up with a regular reporting strategy that works for you.