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What gets measured, gets managed!!!

  • Do you feel you have the finger on the financial pulse of your company?
  • Are you currently creating monthly financial reports?
  • Do you know how to read your financial reports?
  • Do you consider the need to have and understand financial reports as one of the highest priorities in your business?

Free Accounting Software

  • Turbo Cash 5 - www.turbocash.net
  • GnuCash - www.gnucash.org
  • Postbooks - www.sourceforge.net
  • Adminsoft Accounts - www.adminsoftware.biz
  • Waveapps - www.Waveapps.com
  • Quickbooks (not free)

Step 1 - Create a very basic Financial Report Template and prepare your very first monthly financial report.

Step 2 - Set up a meeting with all employees that need to be involved and review the report - line by line.

Why a month to month comparison?

  • Most companies have similar revenue and expense flow on a monthly basis, allowing for a quick way to recognize missing entries.
  • The mistake or problem was, at worst, only 30 days ago.

What's the best way to review this report?

  • When first beginning, every line, but once you are used to it, focus on the greatest variances in the $ and % change columns.

Why a 12 month rolling comparison?

  • Year over year comparisons help you recognize trends of growth or loss and make it easier to see potential problems or concerns (offers a 'bigger picture view').

Why is it important to have key employees in the meeting?

  • It's easier to get answers to questions regarding detail on any questions that arise from the numbers.
  • It creates an opportunity to have key employees understand the data points that are considered important. (What gets measured gets managed)

Step 3 - Make it a monthly habit (You will begin to see your company like never before!!)

Step 4 - Begin creating additional graphs and charts to customize to your needs.

Income Statement - 12 Month Rolling

4 Simple Steps!!!

We need to buy one of these computers before the sale ends !

Income Statement - Month to Month Comparison

Why is this picture here?

Ask your bookkeeper to create the following from your Quickbooks or other accounting software:

This whole program is based on years of trial and error. It's practice not theory.

Cash Flow Forecast

Cash Flow Forecast with an additional 5% growth

Someone forgot these glasses

Joe's Garage

New Customer 4th Qtr Referrals Report

Think of the Balance Sheet as the Accountants version of a storage locker - it's where items are placed that are expected to used, sold or paid for over a period of time (usually longer than several months)

What's the best way to review the Balance Sheet?

  • Focus on the accounts you do understand such as Cash, Accounts Receivable, Accounts Payable and compare to the prior period.
  • Each meeting focus on understanding a new line item you don't understand.
  • When first beginning, every line but once you are used to it, focus on the greatest variances in the $ and % change columns.

What's the best way to review this report?

  • Most companies have similar revenue and expense flow on a monthly basis, allowing for a quick way to recognize missing entries.
  • Helps recognize the cyclical nature of the business.

Why a month to month comparison?

Why a 12 month rolling comparison?

  • Year over year comparisons help you recognize trends of growth or loss and make it easier to see potential problems or concerns.

Why is it important to have key employees in the meeting?

  • It's easier to get answers to questions regarding detail on any questions that arise from the numbers.
  • It creates an opportunity to have key employees understand the data points that are considered important. (What gets measured gets managed)

CEL Class - Offered each Fall

The four steps...

  • It's easy to get started
  • It's a great way to get the team focused on the information that matters

Here's the money for the pizza. My treat!!

  • It increases company communication
  • It helps you make more informative decisions!!
  • It saves and creates more money

How to Read Your Company's Financial Reports

4 Simple Steps to Getting Your Finger on the Financial Pulse of Your Company

  • Profit and Loss Statement - Month to Month Comparison
  • Profit and Loss Statement - 12 Month Rolling Comparison
  • Balance Sheet Summary

We need these to get started!!

How to Read Your Company's Financial Reports

4 Simple Steps to Getting Your Finger on the Financial Pulse of Your Company

Questions

  • What accounting software do you use?
  • Do you have a bookkeeper or tax preparer that is capable of creating simple reports from that accounting software?
  • Do you currently review your financial information on a monthly basis? If not, how often?

Think of the Balance Sheet as the Accountants version of your house garage - it's where they place items that are expected to be stored and/or used for a period of time usually longer than a few months

What's the best way to review the Balance Sheet?

  • Focus on the accounts you do understand such as Cash, Accounts Receivable, Accounts Payable and compare to the prior period.
  • Each meeting focus on understanding a new line item you don't understand.

This Presentation is for you if any of the following apply:

  • You don't fully understand how to read your company's financial information
  • You don't currently have a system in place to produce and review monthly financial reports.
  • You don't feel you have a strong understanding of where all the money is being spent.
  • You don't have a system to forecast your revenue / expenses / net income.
  • You don't have a considerable amount of time to invest in learning how to read financial statements.
  • You're looking for accounting training that offers you the tools to analyze your company's financial information without the use of complicated formulas or definitions.
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