If you don’t regularly run financial reports, you should consider doing so.
But any QuickBooks training class will recommend that you run specific financial reports every month. Your company’s unique structure, needs and levels of accountability may already necessitate a specific set of reports on a regular basis.
If not, here are five types of financial reports that you should be creating monthly, at a minimum. These are especially important because they examine your financial situation as a whole, as well as in detail. You can make comparisons to previous periods, get a clear picture of where you are now and do some forecasting.
- Profit & Loss Detail (displays transactions within income and expense accounts that contributed to the profit or loss)
- Profit & Loss YTD Comparison (compares P&L from your specified time range to your entire fiscal year-to-date)
- Profit & Loss Prev Year Comparison (compares period to same period in previous fiscal year)
- Profit & Loss by Job (tells you how much you are making or losing on each job)
Balance Sheet is just what it sounds like. What is your company’s value (assets, liabilities and equity)? The Balance Sheet Standard provides balance totals for each account. Other Balance Sheet variations include Detail (starting and ending balances for each account), Prev Year Comparison (how is the value different than what it was on the same date a year ago?) and By Class.
Cash Flow comes in two variations. Statement of Cash Flows tells you what cash came in and went out during a specific period, which Cash Flow Forecast predicts what income and expenses (receivables, payables and banking) will occur in the near future.
Accounts Receivable and Accounts Payable reports, of course, document the state of your receivables and payables. You may be accustomed to running these regularly, but you should take a closer look every month, too. These two groups are broken down into numerous, more targeted reports. Go to the Reports menu and give them a careful look; they may answer questions that frequently come up.
You can drill down to the transaction level in QuickBooks reports and customize them to reveal the exact slice of data you need. If you’re not comfortable working with a wide variety of them, it would be worth taking a QuickBooks course to explore them in depth. Running reports on a regular basis will greatly enhance your understanding of your current financial situation, which is critical to planning and making business decisions.