How Relevant Reporting Will Help Your Business Succeed

What is Relevant Reporting?

Relevant Reporting means keeping your books up to date, running and reading the right reports so you know what's going on with your business finances, even if you're not an accountant. It helps you see where your money has gone, so you can make decisions to help your business soar. With good reporting, your business can run smoothly, meet all obligations, and reach its goals.

4 Relevant Reporting Strategies That Can Help Your Business Succeed

1. Understanding some of the jargon

Here are some explanations for a few important terms:

• Break Even: This is the point where the income equals the expenses. Your business isn't making a profit or a loss, you are covering costs. 

• Gross Profit: This is the income (sales), minus the costs (expenses) to produce or buy your product or service. 

• Net Profit: This is the income, minus all expenses, including running costs, interest, and taxes.

2. Keeping Clear Records

Keeping good records is the key to understanding your business. Here's how to do it:

• Know Your Chart of Accounts: This is a list of all the different categories you can allocate your transactions. It is divided into what you own (assets), what you owe (liabilities), what you've put in or taken out (equity), money coming in (revenue), and money going out (expenses). 

• Keep Your Records Up-to-Date: Always keep track of all your business activities. This includes what you sell, what you buy, loans, taxes, assets etc.

• Set Up Payroll Reports Correctly: In Australia, we have to report wages, taxes, and superannuation to the ATO on the day of the pay event. 

3. Using Xero / MYOB Reports

It's important to know which reports to use and how to understand them to keep track of how your business is doing:

• Picking the Right Reports: Using bookkeeping software like Xero or MYOB, you can run a lot of different reports.  The standard reports to read regularly are your Profit & Loss Statement and Balance Sheet, from there you can work out what other information you would like to know in more detail and find or build a report.

• Up to date reports: Of course to have accurate information in the reports you need to make sure that your data entry is up to date.  Running the reports can show you if there are any errors in the data entry as well as the position of the business.

4. Keep Track of Important Numbers - KPI's

Keeping an eye on the right numbers tells you how your business is performing:

• What are the right KPI's for your business: There is a lot you can track in your business, but knowing what to track can be tricky.  Is there a specific area of the business that is costing you a lot, eg:  if you are a service business do you want to keep track of the labour costs vs the budget for a job. This information can help you determine if you are quoting enough for the work.

• Know Your Numbers: Regularly tracking your KPI's will show you trends and if the changes you are making are having an impact. In turn it will help with setting and achieving goals and budgeting.

• Watch Your Break Even Point: Regularly reviewing your break even point will show you if your expenses have increased, meaning you either have to increase your prices, or reduce your expenses.

Want to Know More?

Stay tuned for our upcoming blogs, we will be diving deeper into each of these strategies. For personalised guidance and to learn more about relevant reporting, join our Elevation Training with Jodi Porteous. Jodi can help you decide which KPI's to track for your business and strategies to improve them.

At Northwest Accountancy, we're committed to helping you build a strong financial foundation for your business. Contact us today to learn how we can support your journey to success.