Good financial reporting provides confidence and promotes better understanding when making decisions.
Whether you’re deciding how much of a product to order, scheduling staff, planning promotional activities or considering employee pay raises, you need to know the financial impact of your choices.
An article on the Dynamic Business website provides a list of four key reports every company should run:
- Cash flow forecasts: This allows you to compare cash on hand and money you’re owed with money you need to pay out during that same period.
- Balance sheet: This shows where your business is financially at a point in time. It outlines what you own vs. what you owe.
- Profit and loss: This gives you an idea of how your business is performing over a specific period, usually months, quarters or years compared against each other.
- Accounts receivable and accounts payable: These provide a summary of money you’re owed and whom you owe money to, respectively.
Technicians must quickly and consistently feed their source transactions into the financial system so that the cash flow analysis is current.
The quicker the supporting service transactions can flow into the financial system, the timelier your reporting will be. To do this, your work order, project management and job costing systems have to integrate with the corporate inventory, accounts receivable, accounts payable and payroll systems.
If your project system can forecast incoming dollars based on quoted projects and display earned value over the coming months, you’ll have improved confidence in your cash flow analysis, as suggested by the Dynamic Business article.
Source: Dynamic Business, September 2012