Many small business owners face the same challenge when operating a business: they get caught up in the many tasks that keep a business running while neglecting seemingly mindless reporting processes.
For a business to be successful in the long-term, it’s important to collect and analyze data through the use of reports. This allows business owners to get into the minutiae of what’s happening behind the scenes, so they can optimize their business. Here are some types of reports every small business needs to use.
Accounts Receivable Aging
Strong invoicing strategies and accounts receivable data go hand in hand. To improve payment processes, entrepreneurs need to create professional-looking pdf invoice templates and implement a strong invoice tracking system. This will allow the business owner or accounting employee to see how long it’s taking for invoices to be paid.
The accounts receivable aging report will give an overview of which customers have outstanding payments, how long it’s taking them to pay, and the amount they still owe. This gives the business an opportunity to follow up and put some pressure on the customer. In some cases, a customer will throw an invoice aside and forget about it. Upon being reminded, they’ll pay it right away. In other cases, it could be a sign of bad business practice that needs to be pursued.
The key takeaway is that having accounts receivable aging report creates a platform for ensuring that a business is getting the money it’s owed.
Log Monitoring Reports
Log monitoring reports are very important for every development department working on a software or handling an operating system. Keeping logs is important to have all the messages of your operating system or software in a single log file. There are many solutions that can help you with keeping them stored in the cloud and with easy to use overview dashboards for analysis such as this log analysis and log management by Loggly.
Sales don’t just keep the doors of a business open; they also indicate behavioral patterns that allow for forecasting and promotional activities. For example, by looking over the past year of sales in an analytical report, a business owner might see a significant increase in sales during the summer and a drop in colder months. This information helps the business owner manage inventory to meet demand in the summer months while trying to improve marketing and manage expenses during the slower months.
Fortunately, extracting or compiling a sales analysis is simple in these modern times. Accounting platforms like Freshbooks create a centralized system for invoicing and sales processing reports. Those who use PayPal for money transfers related to business can pull insights with the click of a button.
Nothing costs a business like poor inventory management. Failure to meet demand strikes a bad note with customers while having too much inventory takes up resources, particularly if they’re perishable.
Inventory management is now easier than ever, as automation and the Internet of Things have created connectivity that allows employees to scan RFID tags and have information instantly uploaded to the inventory management system. This saves time and money for both big and small businesses alike while cutting out tasks that impact the supply chain.
Regardless of what technology is in place, inventory reports show the business owner what’s happening within the business so that they can adjust accordingly. It not only shows what’s in stock and how long it’s been there but also gives insights into the valuation of the inventory item.
Do certain products need to be discontinued because they’re no longer profitable when compared to the overhead costs of housing it? Should a blow-out sale take place to make room for a new shipment of a popular item? Without an inventory report, it’s hard to make these decisions.
Reporting in Small Businesses
It’s astounding how many small business owners don’t truly know what’s going on in their business. By having these reports readily available, it makes strategic decision making simpler, which ultimately makes the business more successful with minimal effort. Businesses should implement one report at a time to get comfortable with analyzing it, and see how it impacts the business before adding another.