What Reports Should I Be Reviewing Monthly?
Running a business without reviewing your financial reports is a bit like driving with your eyes closed. Monthly reports aren’t just something for your accountant to look at — they’re a vital tool for helping you understand what’s going on under the bonnet of your business.
The right reports give clarity, reveal problems before they become serious, and highlight opportunities to grow. But what exactly should you be looking at every month?
Let’s break it down.
1. Profit and Loss (P&L) Statement
What It Shows:
Your income, costs, and expenses over the month.
Whether you made a profit or a loss.
Why It Matters:
It tells you if your business is actually making money — not just whether cash came in. It helps track trends in sales, gross profit, and overheads. Are sales rising? Are expenses creeping up? The P&L is where you find out.
Key Things to Check:
Are sales on target?
Have any costs increased unexpectedly?
Are profit margins holding steady?
2. Cash Flow Report
What It Shows:
How cash moved in and out of the business over the month.
Whether you have enough cash to meet upcoming obligations.
Why It Matters:
Cash flow is the lifeblood of any business. You can be profitable but still run out of cash — especially if customers are slow to pay or expenses land all at once. This report highlights whether cash is tight or healthy.
Key Things to Check:
Are payments from customers coming in on time?
Any big payments going out soon?
Is there enough cash to cover VAT, payroll, rent, and other bills?
3. Aged Receivables (Debtors) Report
What It Shows:
Which customers owe you money.
How long invoices have been outstanding (e.g., 30, 60, 90+ days).
Why It Matters:
Unpaid invoices can choke your cash flow. This report helps you stay on top of who needs chasing — and flags potential bad debts before they become a real problem.
Key Things to Check:
Are there overdue invoices?
Which customers regularly pay late?
Are credit terms being respected?
4. Aged Payables (Creditors) Report
What It Shows:
What your business owes to suppliers.
How long those bills have been outstanding.
Why It Matters:
Staying on top of your bills maintains good supplier relationships and avoids late fees. It also helps manage cash — deciding what needs paying now and what can wait.
Key Things to Check:
Are any payments overdue?
Is cash available to clear upcoming bills?
Are supplier terms being used effectively (e.g., 30 days credit)?
5. Balance Sheet
What It Shows:
The overall financial health of the business at a point in time.
Assets (what you own), liabilities (what you owe), and equity (what’s left).
Why It Matters:
It gives a snapshot of the company’s stability. Are debts growing? Is the business building assets like cash or equipment? It complements the P&L by showing the bigger picture — not just monthly performance.
Key Things to Check:
Are liabilities (loans, tax owed, supplier debts) increasing or decreasing?
Is the cash position stable?
Are assets growing over time?
6. Budget vs. Actual Report
What It Shows:
How actual income and expenses compare to the budget.
Variances (differences) between what you expected and what actually happened.
Why It Matters:
Without comparing reality to your plans, it’s impossible to know if you’re on track. This report flags overspending, underperforming sales, or unexpected costs early.
Key Things to Check:
Are sales ahead or behind expectations?
Are any costs significantly over budget?
Is the business operating within its means?
7. Key Performance Indicators (KPIs) Report
What It Shows:
The key numbers that drive your business. These might include:
Gross profit margin
Net profit margin
Debtor days (how quickly customers pay)
Creditor days (how quickly you pay suppliers)
Sales growth percentage
Customer retention rates
Why It Matters:
KPIs turn the raw data into insights. Tracking the same metrics regularly helps spot trends — whether things are improving, declining, or staying flat.
Key Things to Check:
Are margins holding steady?
Are debtor days increasing (which affects cash flow)?
Are sales growing month on month?
8. VAT Summary (If VAT Registered)
What It Shows:
The VAT collected on sales and the VAT paid on purchases.
Why It Matters:
It helps keep track of how much is owed to HMRC and ensures there are no surprises when the VAT bill arrives.
Key Things to Check:
Is enough money set aside for VAT?
Are VAT entries accurate?
What Happens If You Don’t Review These?
Nasty surprises. Cash flow dries up or tax bills arrive unexpectedly.
Missed warning signs. Costs creep up, customers stop paying, and you don’t realise until it’s critical.
Lost opportunities. Without clear data, it’s harder to spot where to cut waste or where to invest for growth.
Summary Checklist of Monthly Reports:
Profit & Loss (P&L)
Cash Flow Report
Aged Receivables (Debtors)
Aged Payables (Creditors)
Balance Sheet
Budget vs. Actual
Key Performance Indicators (KPIs)
VAT Summary (if applicable)
Reviewing these each month doesn’t need to take hours — but it does make a huge difference in staying in control of your business.
