3 Keys to Simple Business Reports

Every Report should drive good decisions

An excellent business report provides the most important information at a glance, plus it enables you to dig down into key details.
However, business owners often work with a generic reporting layout – despite the fact each and every owner will then tell me their business is far from generic.

In this day and age of packaged computer accounting systems the vast majority of managers and owners rely on the auto-produced reports, generated from the system’s standard General Ledger/Chart of Accounts. This oddly seems to apply to both big and small business – I have seen both Quickbooks and SAP implemented without anyone giving a second thought to the structure of the ledger or the information needed by management.

The perfectly designed Simple Business Reports considers:

* Form
* Functionality
* Features

1. FORM – create a relevant set-up

What varies from company to company, and even office to office is the issue of:

“what is the most important info for your business?”

Think about what is important in your decision-making, how your business operates AND what you might need in the future. The best way to answer these questions is by looking at your business plan and from thinking about your company mission statement, your SWOT, your goals; from taking a quick review – it should become pretty clear where you do, and do not want, to earn and spend money….

 

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2. FUNCTIONALITY – enable your report to summarise

Don’t forget Rule Number 1– whatever is most important should be most obvious.
Whilst the devil is in the detail, too much detail can actually detract from the story – it is important you are regularly able to make quick and effective reviews of summary information.

On the other hand, still, make sure you can see all the Details supporting every part of your Simple Reports; – these details will provide information for any root cause analysis and highlight where and how to improve your business.

For example we usually recommend any number that is generally more than 5% – 15% of cost should be appearing on your Profit and Loss Report (Income Statement) as a separate line item; and items less than that we summaries into bundles…
What this means is:

  • Salaries, on costs, super, amenities, training  = PEOPLE
  • Travel, and Motor Vehicles = TRANSPORT
  • Rent, electricity, rates, Repairs and small assets = FACILITIES

The outcomes here will depend on the flexibility of the software you are using – but even a simple excel sheet can be setup with sub-totals and summaries.  In larger systems like SAP General ledger codes can be mapped to total within headings, but it still remains better to also group codes as like with like – it makes the details easier gloss through.

 

3. FEATURES – include a comparative and some ratios

Always include a relevant prior period for comparison – if this is a weekly report, include two prior weeks, if it is a monthly report for July include June as the prior month PLUS include July from the prior year.

Familiarity and comparison will reveal trends.  Trends will enable you to quickly able to spot something odd and investigate (it may end up as a simple coding error), or react effectively to a price hike – best quickly change suppliers or increase your own prices, instead of bemoaning a profit drop months after the vendor has changed.

Play around with the comparatives, cycle through several different comparisons periods – last period one week, last month the next week this time last year the next, and then start back again.

Ratios are a really effective way of gauging performance because they relate two, or more, variables to each other, total sales is a useful figure to know, but total sales per sales person enables you to highlight strengths and weaknesses to lead improvements.

 

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Ideally, look at the summary report every week and the details monthly.  It should only take 3-5 minutes to run it and check it and the benefits are exponential.  (If you don’t know how to run your own Simple Report as and when you need, I challenge you to ask your accountant/bookkeeper/assistant/advisor to show you how this week – the extra knowledge at your fingertips whenever you want will be very inspiring)

If you are a smaller business and do your own data entry – then discipline yourself to summaries your expenses into the same format each month/quarter; creating a standardised information base from which to compare.

Designing perfect reports assumes you have already overcome the very obvious issue of:
“rubbish in = rubbish out”,
and are confident that the information basis for the report is being entered accurately and in a timely manner.

 

Your Reports are not locked in stone; they should evolve as your needs change!
That isn’t to say that your data entry and collection should vary frequently. If you capture as much information in as granular a way as possible it becomes quick and easy to construct simple business reports that follow these rules and provide critical and current decision-making tools.

 

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2016-12-20T13:08:20+00:00