Small businesses need to leverage all the tools at their disposal to make the most of their cash flow, marketing, and day-to-day operations. 29% of small businesses fail because they run out of capital. What if there was a way to stay on top of your income, expenses, and more all without any complicated process?
Small business reporting is just that. Running your own reports is simple, and you likely already have the systems in place. New entrepreneurs are often intimidated by their accounting and their stats. It’s normal to be a bit confused when you’re first getting started, but you can’t just stick your head in the sand. The more you learn about the status of your business, the better you’ll be equipped to prepare for the future.
When it comes to your business, not all reports are created equal. Some share vital information while others just get in the way. How do you know which are worth your time and analysis? Start with these 3 reports below that every small business needs to use if they want to succeed today.
1. Profit & Loss Statement
If you want to know how well your business finances are performing at any one moment in time, you need to create a profit and loss statement. This is essentially an income statement. It shows your revenue, costs, and expenses for any period of time. This shows your net income which will be essential when you’re calculating taxes at the end of each quarter.
Preparing a profit and loss statement isn’t complicated. You don’t need a degree in accounting to do it for yourself as long as you have some patience to make sure it’s accurate. You need all of the following information, much of which you can get from your point of sale system:
Transaction listings - These are all of the transactions done with your business funds or with business credit cards. Also, include any cash transactions for which you have receipts.
Income - All sources of income including cash and credit card statements. Don’t forget any invoices (learn more about invoicing here).
Discounts - Include information on any discounts or returns.
Creating your statement is as simple as listing your income and subtracting expenses. You should run a profit and loss statement at least every quarter, but you can do it on a monthly basis if you’re trying to learn more about the state of your company.
2. Website Traffic Report
Your website traffic is also an important part of running your business. Even if you don’t have a firm grasp of digital marketing, you should be doing your best to take your business digital. Local and global businesses alike need a strong internet presence in this day and age. BrightLocal reports that 97% of consumers look online for local businesses, and 12% of them look for local businesses on a daily basis. These are statistics worth paying attention to if you want to be seen online.
How can you use a website traffic report? First, you can check if people are actually visiting your website. You can see which areas they’re most interested in by checking your most visited pages. Beyond this, you can analyze your referral traffic. What marketing channels are bringing you the most traffic?
The easiest way to conduct a website traffic report is through Google Analytics. This is a free platform by Google that shows you a variety of information about your website progress over time. From demographics to referral traffic, this platform breaks it down in one place.
3. Payroll Reports
Finally, you should create a system for payroll reports. Knowing how much you’re spending on employees is essential for optimizing your schedule. As a small business owner, you need to know when you need the most employees and when you can work with a smaller team.
Creating payroll reports ensures you’re on track with everything from accurate hours to tax preparation. These reports can include things like total pay, employee details, payroll contributions, and time activities for individual employees. The right payroll software can optimize these results quickly so you don’t have to struggle through large amounts of information and stats on your own.
Running a lean company is essential today, especially for small businesses. Make sure you’re making the most of the employees you do have and not hiring too many people at once. Payroll reports should be conducted regularly, at least once a quarter, to ensure you’re on track with your income goals.
As a small business, you need any edge you can get today against the big companies. Having a smart system for creating and analyzing reports will help you understand your business on a deeper level. You have the advantage of being able to oversee even the smaller details personally, so why not use it?
Don’t let these facts and figures intimidate you. This is your business, and only you are responsible for making the most of these numbers. The better you become at reading them and understanding their significance, the more equipped you’ll be to make important decisions about the future of your business.