What financial reports should business owners review every month?

Business owners should review several financial reports each month to stay informed about the financial health of their company. Here are some key financial reports that business owners should review on a monthly basis:

Profit and loss (P&L) statement: This report shows the revenue and expenses of the business over a specific period of time, such as a month or quarter. It can help business owners identify trends and areas where they can cut costs or increase revenue.

Cash flow statement: This report shows the amount of cash coming in and going out of the business over a specific period of time. It can help business owners understand their cash flow position and identify potential cash flow issues.

Balance sheet: This report shows the assets, liabilities, and equity of the business at a specific point in time. It can help business owners understand the financial position of the business and identify areas where they may need to increase their assets or reduce their liabilities.

Accounts receivable aging report: This report shows the outstanding invoices and the length of time they have been unpaid. It can help business owners identify customers who are slow to pay and take action to collect overdue payments.

Accounts payable aging report: This report shows the outstanding bills and the length of time they have been unpaid. It can help business owners identify bills that need to be paid and prioritize payments to avoid late fees or penalties.

By reviewing these financial reports each month, business owners can stay informed about the financial health of their company and make informed decisions about their business operations. Additionally, working with a financial professional can help ensure that these reports are accurate and meaningful.