Three Essential Bookkeeping Reports You Need Monthly
Ryan Bourlier

Managing the financial side of your business can often feel overwhelming. As a business owner, you wear many hats, and financial oversight is undoubtedly one of the most challenging. Yet, dedicating time each month to review key financial reports is invaluable. Not only does it help you catch potential issues early, but it also reveals growth opportunities and aids in making informed business decisions.

Accounts Receivable Aging Report

This report breaks down your unpaid invoices by the length of time they’ve been outstanding. Its primary purpose is to support healthy cash flow by identifying payment delays. Keeping an eye on this report helps ensure that late payments don’t become the norm, which could strain your financial stability.

  • Red Flags to watch for:
    • Increasing number of late payments in the 60–90+ day range.
    • Overreliance on a single customer with overdue invoices.

Balance Sheet

A balance sheet offers a snapshot of your company’s assets, liabilities, and equity at a specific point in time. It allows you to assess financial stability and informs smarter decisions about growth opportunities or risk management.

  • Red Flags to notice:
    • Shrinking cash balance with unclear causes.
    • Rising debt without matching income growth.
    • Negative or shrinking owner equity.

Income Statement (Profit and Loss Statement)

This report summarizes your income and expenses over a given period, revealing profitability and efficiency in cost management. It is essential for effective budgeting and making strategic investments.

  • Red Flags to pay attention to:
    • Decreasing profit margins.
    • A sudden, unexplained rise in operating expenses.
    • Losses despite steady sales, possibly due to issues with pricing or high overheads.

By taking charge of these crucial reports, you position your business for financial health and success. Consistent review and action on these insights can help you address red flags early and recognize trends that may affect future growth. If you need assistance with your bookkeeping or payroll, feel free to contact our firm for personalized advice.