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3 Steps to Systemise Monthly Reporting

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3 Steps to Systemise Monthly Reporting

When you are clear on your goals, making decisions becomes easy.

When you don’t review your goals and how you’re tracking towards them it becomes harder to make decisions as you lose sight of those goals. One of the best ways to focus on your goals is to convert them into financial goals and establish a system for monthly reporting and review.

Susan came to me for advice on her business, she had a team of 10 and business was booming, or so it appeared. But behind the scenes it didn’t look so good; cash flow was difficult, profits had diminished, and Susan was finding it harder to pay herself from the business. Typical growing pains.

Susan and her business manager had already set up reporting systems using these three steps:

Step 1.  Document the who, what and when.

Determine exactly what needs to be done at the end of the month to ensure the bookkeeping is up-to-date, that all bank accounts are reconciled, all invoices and bills are entered and the accounting system accurate. Once this is completed, identify what reports are to be produced and where from. Each step needs to have a time deadline and who is responsible for completion.

Step 2.  Create meaningful management reports.

Management reports are not the same as financial reports produced by your accountant, these are reports that on the one hand are more detailed, but on the other hand, hone in on key numbers that are fundamental to achieving your goals.

In addition to financial information, consider whether additional reporting is required from systems outside the accounting system (e.g. marketing metrics, lead generation, pipeline). Also, look at how best the numbers can be reported to provide useful information for management. This may mean graphical reports and will always mean actual results compared to the goals.

Step 3.  Allocate time every month for a review of the numbers.

Put aside an hour or two every month to go through the numbers. If you have an advisor to attend the meeting even better, as your advisor will help you to see through the numbers to the story they tell about your business and how well you are on track towards your goals.

If you don’t have an advisor and no one to join you in the meeting, block out your diary and methodically go through the reports by yourself. Look for what is on track with the goals and give yourself a pat on the back for a job well done. Look at what is not on track and think about what you could do differently that would improve the results to get them back on track.

Susan had a number of issues in her business, but the first one was that she had not set the financial goals so whilst she had the steps in place to review the figures, she didn’t have her goals to compare her results too. This meant that when she reviewed the numbers, she couldn’t tell where exactly things were off track.

Once we put in place financial goals and started to report against them, it became abundantly clear the main area that needed attention, which was the productivity of the team. Susan was selling services based on her estimate of the time it would take to complete, but her team were taking significantly longer, sometimes three times longer to complete the work. This was eroding her profit. Armed with that knowledge, Susan has been able to work with her team, put in place systems for their work, advise them of time expectations on the services and has improved their productivity and in turn, increased her profits.

Having clear goals and regularly reviewing progress helps to make decisions easier in business. It’s about using the history to help gauge the future and change the future based on the history by learning what needs to be improved and changed.

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