You're a small business owner with product sales, taxes, payroll, expenses etc. Keeping on top of your financial health may seem daunting but it does not need to. In case you make use of QuickBooks you have tools already. The smartest and easiest thing you can do every month is review several key financial reports.
A 2023 report by Intuit found that over 80% of U.S. small companies with QuickBooks say it helps them make better financial choices. Reviewing several reports per month can reveal cash flow problems, where you're spending a lot or tax headaches before they begin.
Listed here are the top 5 QuickBooks reports every US small business should review each month and how they will help you keep your business on course. Whenever you begin to really feel like you are in over your head, that may mean you need an accountant or perhaps a personal accountant to ease the load.
Top 5 QuickBooks Reports Every US Small Business Should Review Monthly
Below are the top 5 QB reports for every small US business:
1. Income and Loss Report (P&L)
This is a report about if your business is making money or not. It displays your income, your expenses, what is left of your total profit/loss for a specific time (such as the final month).
Why It Matters:
- It informs you of how much you made versus how much you spent.
- It identifies trends like rising expenses or even dipping sales.
- It is frequently asked by lenders or investors before they provide funding.
How to Use It:
Compare your P&L each month with the last month. Are your profits growing or declining? When you are spending more than you are making, you should investigate. In case necessary, a personal accountant can break it down line by line.
2. Balance sheet
It tells where your business stands financially at a particular time. It shows what you possess (stocks), what you owe (liabilities) and what is left (equity).
Why It Matters:
- It informs you of whether your small business is healthy financially.
- See if you have more debts than assets.
- It helps you understand your cash and loan balances.
How to Use It:
Look at your balance sheet monthly for changes in debt, cash or asset values. In case your liabilities are increasing faster compared to your assets, raise a red flag. This might be a great time to locate an accountant who could recommend ways to improve your finances.
3. Accounts Receivable
This Report shows who owes you cash, How much and when. It may be called A/R Aging Summary in QuickBooks.
Why It Matters:
- It tracks due invoices and helps you control your cash flow.
- You can take action on customers who haven't paid on time.
- It shows you persistent late payers.
How to Use It:
Look at this report each month for overdue accounts. Cash flow issues usually arise from small businesses waiting too long to collect. In case this report shows a lot of overdue invoices, you should have your collections procedure in order or even get an accountant to enable you to simplify your billing.
4. Cash Flow Statement
Even profitable businesses may be in trouble in case they lack money in the bank. The Cash Flow Statement indicates exactly where your Cash is coming from and also exactly where it will go so you understand when you can afford the bills.
Why It Matters:
- This indicates the amount of money your small business makes.
- It describes cash flow from activities, investing and financing.
- It lets you plan for big purchases or slow months.
How to Use It:
Review this monthly to prevent cash shortages. If cash is tight, postpone big expenses or even accelerate collection. In case you continue running into cash flow issues each month, a personal accountant will let you know what is wrong and the ways to correct it.
5. Expenses by Vendor Summary
This report shows exactly how much money you spent with each Vendor. Office supplies, contractors or software subscriptions this report describes everything.
Why It Matters:
- It helps you understand your biggest expenses.
- You can recognize vendors that charge too much.
- It helps plan budgets and negotiate better deals.
How to Use It:
Look for unusually high costs. Was your web hosting bill doubled? Still paying for a service you no longer make use of? These are things a monthly review can pick up. Having difficulty determining how to group these costs may indicate you need an accountant for better recordkeeping.
Bonus Tip: Make Your Reports Custom and Automated
You can automate these reports within QuickBooks Online so they arrive at your email every month. You may also specify date ranges, filter accounts or compare periods. This causes it to be simpler to detect changes and track trends.
If all this upsetting seems complicated for you, you aren't alone. In the beginning, many small businesses found QuickBooks confusing. That is where having a personal accountant is able to pay off not only for tax time but each month.
What If You Ignore These Reports?
Not going to the monthly financial check ins may bring about severe issues :
- You might spend more than you understand.
- Unpaid invoices add up and stall your cash flow.
- If your books are sloppy, tax season is a nightmare.
- You miss growth opportunities because you lack visibility into your finances.
A 2022 QuickBooks survey showed that 64% of small business proprietors who do not review reports monthly are anxious or unprepared for tax season. Keeping ahead of your books makes it easier and provides you with greater control.
What a Personal Accountant Can Do?
Even with QuickBooks, you might not understand what the numbers mean or how to fix a monetary issue. That is common. Your personal accountant is able to do more than write your tax returns they can:
- Bring your monthly reports.
- What exactly do those numbers indicate?
- Help plan your cash flow.
- Cover your bases with IRS rules.
In case your business is expanding quickly or gets more complicated, you may require an accountant to help you scale your finances up.
Also Read: Affordable QuickBooks Bookkeeping Services for Startups
Conclusion
QuickBooks is your perfect business dashboard. If you review these top five reports every month - Profit & Loss, A/R Aging, Balance Sheet, Cash Flow Statement & Expenses by Vendor, you are better equipped to track your financial health. You will spot issues early, fix issues quicker and make far better business decisions.
However, in case you get lost in the numbers or too busy to remain regular, that is your sign you may want to hire an accountant or perhaps a personal accountant. Whether you are just getting started or if you are growing quickly, having expert eyes on your finances can be the real difference.
