Some things in business run like clockwork. They come around at the same time every week, month or year, and you know where you’re at. Other things – like checking finance reports – are more organic.
That makes answering the question of how often you should check your finance reports tricky to answer. There’s no golden rule and there’s certainly no one-size-fits-all solution either.
That said, the ideal amount is most probably a great deal more than you’re doing right now.
So, how exactly do you decipher the optimal frequency?
Mostly, it boils down to the growth stage of your business, how much time you have to dedicate to it, and whether or not you’ve got the luxury of a finance specialist (e.g., an accountant) working to your advantage.
At a minimum, checking in to review your reports at least once a month; twice a month would be even better.
In an ideal world, there would be some time scheduled in every single week, dedicated to reviewing and analysing finance reports.
What should I be looking at in my financial reports?
When doing so, remember it’s about more than just scanning all the way down to the bottom to check whether you’re in the green or the red. Particularly for startups and early growth stage small businesses where every decision made is crucial.
Naturally, a lack of time is one of the leading causes of business owners, accounts teams and CFOs reviewing financial reports too infrequently, but a lack of knowledge is also a common culprit.
As a rule, business owners and their employees perhaps don’t have the same breadth of knowledge to apply to reading financial reports that an accountant would, for example.
When they don’t know what they’re looking for, analysing reports slips down the priority list through fear of the unknown, or a lack of awareness about the value this kind of exercise can add.
When reviewing your finance reports, you should be looking out for things like:
- Profit and loss statement.
- If invoices were sent out in a timely manner.
- If all expenses recorded and up to date.
- Where cost savings could be being made.
- If you’re working within budget – and if not, why not?
- Consistency with past reports.
- The status of your balance sheet.
The benefits of checking your finance reports more regularly
While adding yet another task to your to-do list might seem pretty daunting, we can guarantee that making more time for reviewing your finance report will pay off.
To support our argument and to encourage you to make report analysis a more regular and consistent occurrence, here are just some of the main benefits:
- You’ll have the information you need to make more educated decisions.
- The decisions you do make will become more strategic, with more structured direction.
- You’ll have the data you need to back up suggestions for areas of development.
- You’ll be able to nip any unnecessary spending in the bud much earlier on.
- Your cash flow will be better protected as you can be more proactive and reactive.
- You’ll cultivate more confidence in the business decisions you make.
- You’ll be able to spot and fix errors before they have chance to become much bigger issues.
Finance reports are an incredibly valuable and insightful tool that every single team across a company can benefit from in some way. So, it’s time to start tapping in more often.
What if I don’t have time to check my finance reports that often?
We totally get it – you put the busy in business owner (humour us on that one). Lunch hour?! What’s one of those?
You most likely barely have the time to get eight hours sleep a night, never mind comb through your finance reports on a regular basis.
That’s where the beauty of working with a qualified accountant really hits home. A finance specialist like them is literally trained (and paid) to create and monitor your finance reports. It’s still crucial that you review them too (sorry), but having them as a second set of eyes will be a huge step forward.
- It will save you hours and hours of time that you can spend growing your empire in other ways.
- They have the training and acumen required to translate your reports into educated business decisions that will have a positive impact on your bottom line.
- They will also be able to spot any errors or anomalies across your accounts that could end up being problematic if left neglected.
So, if you don’t already have a business accountant on your extended workforce, now might just be the perfect time to invest.
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