The 5 Financial Reports You Need To Run Your Business

Annual and Monthly Budget
This is a forward-looking plan projecting where you want to go. If you don’t have a decent budget your business doesn’t have intention.

Monthly Profit and Loss (P&L)
This will let us know how we are doing and if we are staying on course with our budget.

Weekly Cash Flow Projection
Profit and loss always lag. A rolling thirteen-week cash flow projection gives you a vital lead measure.  You take your opening cash balance, add your projected receipts, deduct your projected payouts. This gives you a fairly quick read on your business and lets you know what your upcoming cash flow will be.

Profit and Loss (P&L) Forecast
is another lead measure.  Similar to your budget the forecast lets you play with revenues and expenses and create scenarios and see how they might affect the year.

Balance Sheet
There is no better at a glance tool to measure your company's net worth.

 

These 5 reports create a story for your company.

It’s like taking a trip across the country...

 

Budgeting
This is the financial planning you start in January when coordinating your summer vacation.
The budget is kind of like planning your summer vacation.  So this summer we are going to plan a cross-country road trip from Sacramento to Washington D.C.  This lays out the plan of how we are going to get to our goal - Washington D.C.

Monthly Profit & Loss (P&L) 
This is what happened yesterday on the trip. We compare this to the Budget.  We ask a question and understand the variances between the P&L and the Budget. We want to know why things aren't happening like we thought they should.

Weekly Cash Flow 
This report helps you answer questions like, “Okay based on what happened yesterday we only will make it to Tennessee because the mountains are using more gas than we expected.”

Okay based on what happened so far on the road trip it helps us look at how much cash we have spent and how much we have left to spend.  So, we used more money to purchase gas going over the Sierra Nevada and Rockies due to poor fuel economy.  How are we going to adjust?

Profit and Loss (P&L) Forecast
This is your budget adjustments. “How will we adapt or change to meet budget?” “What do we need to do to get back on track?” OR “We are spending less on the hotel than we anticipated, so what do we do with the extra money?” 

The forecast is kind of like the budget and Cash flow combined.  Based on what is happening how would we change the Budget.  Do we choose cheaper lodging, Shorten the trip or willing to spend more to make the trip.

Balance Sheet
This is the collection of vacations you have spent with your family and show the wealth of your family experiences.

 

If these reports overwhelm you, start small. Review your profit and loss (P&L) monthly. Then, create a cash flow projection. The cash flow projection helps identify where your sales will come from.


Need some extra help? Set up a meeting with Dan at info@everysinglebean.com
 

Be a good human bean,

Dan

 

The Fishbowl

One of the tendencies of running a business is that our focus gets too narrow, we are working on a myriad of business ownership to-dos.

Periodically take the time to look at your business as if it is in a fishbowl.  Observe and listen to how it operates. View your business like you are a client visiting for the first time. Take a tablet and walk your office and jot down what you observe that could be fixed.  Here are a couple of the things I see when I visit clients.

Is your office clean? Death to dust bunnies!
Are windows free of smudges and handprints?
Do you have a water container in the lobby (and is it empty)?
How are the phones being answered?
Are business cards available?
Are clients aware of your social media?
Is everybody in the proper attire? 
How are your clients greeted when they walk in and how are they acknowledged as they leave?
Does the “feel” of the office even match your vision for your company?

By putting your business into the fishbowl, you can proactively solve problems before they exist. I would walk your office once a month until meets your expectations. This will help to plan and create the experience you want for your clients. We want to give each client the same intentioned experience.  Keeping your clients happy enables you to establish lifelong repeat clients. The value of a long time repeat client is worth a lot and a great customer experience leads to positive word of mouth.

Be a good human Bean,

Dan