2019-05-10 09:00:22 Running a Business English Discover 4 financial reports that will help you take control of your small business. From sales tax reports to small business payroll.... https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2019/05/Webp.net-resizeimage-11.jpg https://quickbooks.intuit.com/ca/resources/business/4-reports-that-put-you-in-control-of-your-business/ 4 Reports That Put You in Control of Your Business

4 Reports That Put You in Control of Your Business

7 min read

Are you launching a new small business? Are you wondering how to stay on top of your company’s finances? Having the right data helps you develop a winning game plan and make timely decisions, so you’ll know when to pivot on strategy, cut back on costs, improve time management, and more.

It is crucial that you perform regular health audits of your business to see how well you’re meeting your goals from a real-time financial standpoint. It may be a bit tedious, but digging deep into your data doesn’t have to be a buzzkill.

In fact, because this data is vital to your success, you should learn to look forward to these sessions.

That being said, this information can still be tricky to decipher, but it is worth learning to do. When you scroll through Facebook to weed out the posts and ads that mean nothing to you so you can focus on those that do, it saves you time later because the useless stuff is no longer clogging your feed. Likewise, with reports, over time you will come to know which data sets matter, which ones are just kinda nice to know, and which ones you can dispense with.

Take a good, thorough look through these reports on a regular basis, and they will guide you to a better grasp of your business finances in no time.

Invoicing Report

Do Clients Pay Your Invoices in a Timely Manner?

Some of the best self-employed advice revolves around invoicing – are you being too lenient with your clients when it comes to billing? Running a report that shows how often you’re being paid on time – or at all – offers a clear snapshot of your company’s health. This report shows you the average amount of time it takes for a client to pay you. If there is a high percentage of clients who take too long to pay, this report can help get you on track to manage the problem.

While it’s certainly not rocket science, the figures from this particular report might be wreaking havoc on your bottom line. Not being paid for 2-3 months can put a stranglehold on your cash flow in some cases. It means you might not be able to pay your company’s vendors or even cover some of your most basic operating costs such as payroll. You might even have to cut back on employee hours and let one or more of them go. If you have clients who are consistently more than five days late on a payment, it might be a good idea to try some of the following tactics:

  • Make payment terms less flexible
  • Implement late fees
  • Offer incentives for payments received ahead of schedule

Your payment terms and the payment types you accept should be printed in both your contract with the client and on your invoices. For clients who are continually slow payers, payment terms of Due Upon Receipt (printed in red ink if possible) can sometimes help speed up the process. Even if it fails to produce the desired result, it informs the client that you’ve noticed when they’re falling behind.

Employee Timesheets Report

How effective is your method of time tracking?

For hourly employees, is it standard practice for your company to track the actual time they spend working? Do you know where you could make improvements? What if you had to lay off some of your team? The answers to these questions can have a significant impact on your small business payroll.

If you’re concerned about the potential misuse of your current method of time tracking for your employee timesheets, ask yourself if one or more of your employees are:

  • Working on projects that aren’t company-related during business hours?
  • Taking longer breaks than allotted?
  • Misrepresenting hours worked?

The answers to these questions can make a big difference to your company’s bottom line, but you may want to tread carefully. If you suddenly begin to monitor your team more closely than you previously have done, it could backfire, causing resentment and an overall reduction of employee morale. Instead, empower your managers and yourself by implementing project management software that includes a built-in time-tracking option. This method is not the least bit obvious or invasive, and it helps you to secure actual data that can be helpful.

Do you have clear timesheet policies?

For example, let’s say you have an hourly-wage employee in your office who also performs freelance work from home for his private clients. Occasionally, he works on his client’s blog posts at his desk in your office. Sometimes, he even takes his client’s calls in the middle of one of your company’s projects. Maybe he even comes perilously close to missing deadlines as a result of these infractions — or worse, he actually does miss deadlines. He’s always charming and apologetic, but if he’s costing you money, how far is too far?

Do you have a company policy that outlines what is and is not acceptable in the workplace? These instances above may be fine when they are the exception and not the rule, but when an employee begins to feel complacent, they’re destroying your bottom line. Salaried employees may be expected to stay and finish projects regardless of how long it takes, but when you pay an hourly wage, those extra hours turn into overtime wages. Furthermore, even a salaried employee staying late means you have to keep the lights and heat on longer, so it really is crucial to minimize the extra time spent in the office by any employees on non-company business.

It’s imperative you make it abundantly clear just how much outside or personal business is tolerable and that you define clear limits. Lunchtime and breaks are an employee’s own time, and these are not to be abused. The first time your limits are violated, give the employee a warning. After that, implement incremental consequences, with termination being a last resort for those who just refuse to get with the program.

Also, when you are gauging employee performance, the old adage “praise in public, problems in private” is a good rule of thumb. Even if you’re having issues with an employee’s behavior, be sure to balance your evaluation by mentioning their accomplishments first, rather than jumping straight into a tirade about how many times they’ve returned late from lunch.

Sales Tax Report

Do you stay on top of your taxes?

Ensuring that your tax payments reach the Canada Revenue Agency (CRA) is a tedious but vital aspect of your small business. Whenever you make a sale, your sales tax should always be recorded as a separate charge on your invoice.

Sometimes, a business that sells only services will incorporate the sales tax charges into their fee per service. While this may look nice on paper, especially for the clients, it can turn calculating your quarterly taxes into more of a headache than it needs to be. It is considered “best practice” to maintain the separation of charges for the product or service and the portion that applies to sales tax. This is also beneficial to you because it helps you to avoid over-and underpayments to the CRA. If you underpay, you’ll likely receive a letter in short order detailing your mistake and demanding that payment arrangements be made promptly. When you overpay, it could take a while to recoup those funds.

By implementing the use of cloud accounting software, many of these calculations are made for you, and you can even set your software to make your CRA payments, too automatically. What could be more reassuring than automated tax payments?

Profit and Loss Report

What you’re spending vs. what’s coming in

The health of your business ultimately boils down to two primary factors in your day-to-day operations – how much you’re spending, and how much you’re earning. Summarizing your income and expenses is much more insightful than merely printing off a revenue report. Profit and loss reports can be automated to run at set intervals, or you can choose to manually run them every time you need to see a clear picture of your real-time business data.

Monitoring your company’s profits and losses helps you to maintain a grip on your overall cash flow. If you notice that you’ve got more money going out at a particular time of the year than the amount you have coming in, it’s a sign that you need to alter your strategies as that season approaches in upcoming years. In the unfortunate instance that you find your profit margins low report after report, it could be a sign that something is chronically wrong with your current business practices. It might be time to consider drastic actions such as increasing the fees you charge for your services or belt-tightening austerity tactics such as cutting unnecessary expenses.

Getting a Step Ahead

Managing a business means you’re going to make many decisions about your company’s future every day. Whether you’re choosing new vendors for the products or supplies your office uses or coming up with a brand-new campaign to boost your marketing game, every choice you make affects your business.

Running reports that give you access to the right data is an essential element to help you make decisions that can improve your bottom line and put your company ahead of its competitors.

Improve your cash flow with invoices, payments, and expense tracking. See how much cash you have on hand with QuickBooks. Join 5.6 million businesses today!

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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