What Reports Should You Review Monthly in Your Business?
Running a small business means wearing a lot of hats—but one hat you can’t afford to take off is the financial one. Reviewing your reports each month doesn’t just keep your books in order—it helps you make better decisions, catch problems early, and increase profitability.
If you’ve ever wondered “Which reports actually matter?” this post breaks down the key financial reports every business owner should review monthly.
1. Profit and Loss Statement (P&L)
The Profit and Loss statement, also called the Income Statement, shows your business’s revenue, expenses, and net profit over a set period.
Why it matters:
Lets you see whether your business is profitable
Highlights which expenses are eating into your margins
Helps you spot seasonal trends in income or costs
Tip: Review this monthly to ensure your revenue is trending upward and your expenses are aligned with your budget.
2. Balance Sheet
The Balance Sheet provides a snapshot of your business’s financial position at a specific moment in time, showing assets, liabilities, and equity.
Why it matters:
Shows how much your business owns vs. owes
Helps you understand your true financial health
Useful when applying for loans or funding
Tip: Check your balance sheet monthly to ensure your debt is manageable and you’re building equity.
3. Cash Flow Statement
Even profitable businesses can struggle if cash flow is tight. This report shows how cash moves in and out of your business.
Why it matters:
Ensures you have enough cash to cover expenses
Highlights if you’re spending more than you’re bringing in
Identifies which months are “cash-heavy” vs. “cash-light”
Tip: Reviewing cash flow each month can prevent surprise shortages.
4. Accounts Receivable Report
This report shows which clients or customers owe you money and how long invoices have been outstanding.
Why it matters:
Helps you follow up on overdue payments
Prevents cash flow issues from unpaid invoices
Keeps your records clean for tax season
Tip: Review AR monthly and follow up on anything older than 30 days.
5. Accounts Payable Report
This report tracks what your business owes—such as bills, supplier payments, or vendor invoices.
Why it matters:
Ensures you never miss a payment deadline
Helps you maintain good vendor relationships
Keeps you on top of expenses
Tip: Checking this monthly helps you plan for upcoming bills and avoid late fees.
6. Budget vs. Actual Report
A budget is only useful if you track against it. This report compares your projected numbers to actual income and expenses.
Why it matters:
Shows if you’re overspending in certain categories
Keeps you accountable to financial goals
Helps you adjust quickly if something is off track
Tip: Review this monthly to make small corrections before they become big problems.
Final Thoughts
Reviewing these reports monthly may feel overwhelming at first, but once you get into the habit, it becomes second nature—and a powerful tool for running a profitable business.
Instead of waiting until tax season to “catch up,” stay proactive. Your numbers will tell you where your business stands and where it’s headed—if you look at them regularly.
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