If you want to track where your money goes, prepare monthly financial statements. Your business will not grow if you don’t keep your financial affairs in order. Financial reports review your business activities and show you problem areas. This will assist you in making decisions that will bring you more money. In this article, we’ll show you you can prepare monthly financial reports. 

What Are Financial Reports? 

A financial report contains documents that show your business performance over time. You can prepare them yourself or hire experts, so there are no mistakes. It shows you if your business is making a profit or running a loss. This will help you identify where to make adjustments or improvements. These reports are often made daily, weekly, or monthly. It is advisable to make monthly financial statements. This will give you enough time to determine if your strategies are working. Also, you get to know if something has gone wrong, as soon as it happens. 

Steps To Creating Monthly Financial Reports 

Here are some ways you can put together a monthly financial report for your business:

#1. Define Your Goals

The first thing you should do is establish what you want to achieve with the report. This will help you determine what your report should look like. If it is an internal report, you can use financial jargon and data. For external parties, use simple terms instead, to avoid difficulties. This is a very important step, take your time verifying everything. You can also hire experts to do this for you. 

#2. Outline Your Metrics

These are the Key Performance Indicators (KPIs) that track your business progress. Some of the important documents that should make up your reports are:

• Balance Sheet, which is a summary of your financial status after a certain duration. It also lists your business assets and liabilities. 
• Income Statement which shows the revenue your business gained during the month. It determines if the business is profitable or not. 
• A Cash flow statement documents how much money was available. It also shows if your business made cash or lost it during the month. 

#3. Automate Your Records

This is the easiest way to track your money and save yourself time. You can use professional tools and software to do this. These come with templates that make it easier to input figures and work on the go. This is better than the manual method which is time-consuming.

#4. Hire A Professional 

Dealing with financial records can be difficult and exhausting. So, you need experts to help you with the process. This will give you time to focus on other important issues. It will also cut out mistakes from your report, as these professionals are thorough. 

Conclusion 

Monthly financial reports help you check your business performance over time. This will help you plan and budget your way forward. It is one way to improve the financial health of your business. You can talk to an expert at Tax Prep Buddies to walk you through the process.