Many small businesses rely on reports from their CPA to see how their business performed. Unfortunately, by the time many small businesses get their reports it’s way past when they needed to see them. I’m not bashing or blaming the CPA firms. I used to be a CPA in industry. CPAs have tons of clients so it takes a while to do all their clients’ reports as everybody’s month or quarter ends at the same time. On top of that, most of these reports are “accounting” reports and while I’m sure they meet “accounting standards”, they often serve as a poor management tool for managing most small businesses.
So what’s missing (other than maybe timeliness), you may be asking. As there are almost as many types of small businesses as there are small business owners, I will point out just a few generic possibilities that may serve to get you thinking. These are:
1. Does your accounting reports tell you what inventory items are turning the slowest and need attention?
2. For manufacturers, can your reports tell you which items are the most or least profitable?
3. Did your latest report flag the fact that even though your sales didn’t vary from what you expected, your product mix for the month was a lot less profitable?
4. Did your report let you know that you are critically low on a key raw material component due to changes in customer order patterns?
5. Did your reports tell you that one of your biggest customers has moved from paying in 30 days to 50 days, straining your cash flow?
6. Do your current reports tell you that your returns spiked last month due to a manufacturing quality problem that no one told about?
7. Do you feel it is easy to quickly see how your business performed last month from your current reports or do you have to study them and do a lot of research to really figure out what happened?
If you answered yes to these questions, then congratulations! You probably are getting great reports from your accountant or are preparing some quality reports internally. If you answered no to any of these questions, then what can you do about it?
Ron Stone is a lifestyle and financial professional. Among his companies is an insurance agency specializing in trucking company health insurance. Learn more about the affordability of truckers health insurance at, Truckers Insurance or Truck Driver Health Insurance