Monthly Financial Reports

It takes a lot of work to run a successful business. Whether you’re the owner of a small business or managing one, you need to stay on top of financial matters and ensure that you have the most accurate information available to you.

Finances are more complicated than simply determining how much money you have in the bank on any given day. To stay current on your finances, your company needs to run a monthly financial report to get a clear picture of the financial health of your business.

What Is A Financial Report?

You might also hear a financial report referred to as a finance report or a financial statement. It is a tool for management to view essential, key financial information about a business. Most financial reports use key performance indicators (KPIs) to create an overall picture of the company’s finances.

A financial report offers you all the key information about your business’s financial condition in one location and often uses graphics and other forms of visualization to make it easier for you to find the information that most concerns you. This report can help you:

  • Find the most critical trends in your finances
  • Help you garner fresh insight into your company’s overall financial health
  • Discover ways to increase essential communication between departments
  • Isolate your company’s strengths and weakness

All of this information can help you make positive changes within your business and help you make the best decisions possible. When you utilize monthly financial reports, you make the most of a panoramic view of your company’s finances to build upon success and pivot in areas that are underperforming.

These reports do more than provide you with a financial snapshot of your business. You can also use these reports to provide your stakeholders and creditors with information. These reports can help you make many prudent financial decisions and help you make determinations, such as:

  • Determine if your business makes enough money and enjoys a cash flow that allows you to pay your current debts
  • Highlights how effective your business is at generating a cash flow and where you use the cash
  • Create and use financial ratios that show the position of your company
  • Discover the details of some or all financial transactions for the business
  • Look for and isolate specific financial decisions and transactions that might bring harm to the overall health of your company

When you know what works for your business financially, you can lean into it while minimizing challenges within your financial picture. Monthly financial reports are your opportunity to see what you do well and areas that require improvement.

What Do You Need to Include in a Financial Report?

When you get ready to ask for and use a financial report for the first time for your small business, there are three factors or decisions that you need to make to generate a useful statement. Here’s a look at them:

  1. Determine the intended audience and the information you need: Before you start the report, you need to identify the purpose of the report and the information that you want to learn more about. For example, if you’re more interested in cash flow, you’d gear the report to track more information about it over the course of a month. You also need to determine the audience. If it’s for your stakeholders, you might limit the financial jargon to make it easier for them to understand the information presented in the report.
  2. Determine the metrics that you want to use: With the intended audience in mind and the information you want, you’ll determine the metrics that you want to utilize in your financial report. Metrics is a fancy way of saying you determine the KPIs that you want to represent the overall health of your company. The three most common are:
    1. Balance sheet: This provides a detailed look at the company’s assets, debts to shareholders, and liabilities at a certain point in time.
    2. Cash flow statement: This tracks a business’s cash flow over a predetermined period of time to determine if you’re losing or making cash.
    3. Income statement: Using the formula: net income equal to the revenues and gains minus the expenses and losses, this statement shows the profitability of your company over a predetermined period of time.
  3. Determine the best visuals to represent the information that you’re seeking in the report: Are you loving for a bar graph? Do you want a pie graph? What visual is most compatible with the information that you’re presenting? These are a few of the questions you need to explore before choosing a visual representation of the information. When you choose the right type of visual representation for the information, it highlights the distribution, relationship, composition, and compassion of the metrics presented in the report. It makes it easier for you to see how the information provided affects the aspects of your business.

The best part about financial reports is that you don’t have to wait a month to generate a report. You can decide on your own schedule, and it could be a daily, weekly, monthly, or quarterly report. It might even be a combination of timeframes. The reports can provide you with essential information and help you make important decisions, including:

  • Create a more effective budget
  • Predict future revenue and expenses based on past data
  • Track all of your financial data
  • Determine the processes in your business that work and those that need to be revamped

As a small business owner or manager, you need to stay on top of creating and interpreting monthly financial reports.


A monthly financial report is essential to the overall success of your business and helps you maintain focus on important financial issues. This report can also help you make smart decisions now and in the future about generating revenue and expanding your business.

While you need a monthly financial statement, you don’t always need to handle this chore on your own. At McNurlin Hitchcock, our team of CPAs can help you create and understand your monthly financial reports to make smart financial decisions. Contact us today to learn more!