Bookkeeping Analysis

The Standard Financial Reports

Recently we wrote about looking beyond the profit & loss report and understanding the role of the three core financial reports:

  • The profit & loss report shows the financial performance of the business over a period of time
  • The balance sheet shows the financial position of the business at a set point in time
  • The cash flow shows cash movement of the business over a period of time

Custom Reporting

While these provide a good overview of your businesses financial situation the structure of your accounts might still be hiding unseen issues or might not give you the answers you need to make the right decisions.

When you need to find the answer to a specific question or you need to focus on a single aspect of your business the three core financial reports may be too high and may not give you the answers you need.

This is where we need to start digging deeper and start getting into custom reporting that allows you to focus on certain aspects of your business. For example you may look at a profit and loss report that only shows:

  • Data within a specific time frame. For example you may have had a sale on and you need to check the performance of sales in that period compared to a similar period to see what the impact was.
  • Data for a specific division or department. You might have different departments, by looking at each department individually you can see how they are performing independently of the others.
  • Data for a specific region or store. If you have multiple stores one may be making a loss without you knowing it unless you can run reporting that focuses specifically on that store.
  • Data for a specific product. Check the performance of a given product by focusing on those sales only.

Knowing how you may need to ‘slice and dice’ your reporting means you can set everything up from the beginning to allow this. Most bookkeeping systems will allow you to categorise your transactions which you can then use as filters later on and focus on a given aspect of your business.

Bookkeeping Charting

Flexible custom reporting allows you to focus on the relevant information without the need to sift through huge amounts of data you don’t need, or accidentally exclude important information. You are able to drill down into fine details and discover possible insights you would not see otherwise. When you can break your data down into metrics that matter for your business, you can make smarter decisions and eliminate guesswork.

Key Requirements for Custom Reporting

Custom reporting relies on a few key requirements:

  1. Understanding what you are looking for – By either knowing the specific question you want answered or by at least specifying what particular aspect of the business you want to focus on we can determine what data to include or exclude from the report.
  2. Setting your data up for success – The reporting you can get out of a system is only as good as the quality of the data going into it. If you are not categorising your data entry or using the correct information there is no way to answer the first requirement above without manually sifting through the data to find what is relevant.

Running the Report

Most bookkeeping platforms like Xero, MYOB and QuickBooks have the ability to customise reports to a certain degree. Most will also allow you to filter your data based on categories you’ve set up.

If you’re stuck about how to set up your bookkeeping to get the most out of the information you’re putting in contact the team at Alexilum to help you use your data to answer the questions you’ve been looking for.

We can also create custom reports that are as individual as your business by using your data with our specialised tools and dig even deeper than what your bookkeeping system can do.