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Better Financial Reporting Practices For The Small Business CEO (Part 2)

This blog is the second in a series on financial reporting practices that have greatly improved Pro Back Office’s (PBO) clients' financial and operational results

The last blog covered an overview of the recurring monthly meeting items I review with my clients such as:a) results of the prior month compared to the financial planb) any needed revisions to the financial plan for the remainder of the yearc) operational process improvement initiatives

This month I will cover the Financial Statement Workbook that includes all the key historical information for the entire business that should be measured and monitored. 

Here are contents of an ideal workbook:

• Financial statements - balance sheet, income statement and statement of cash flows for the current year in monthly trend-format with a comparison to the Original Plan and the Revised Plan with notes explaining key variances or events.

• AR aging - as of a date just prior to the meeting with collection status comments.

• Salary schedule – actual and projected.

•  Supporting balance sheet schedules – including details of prepaid expense, fixed assets, accrued liabilities and other material general ledger accounts.

• Customer base schedule – showing the changes in the customer base during the month, including new customers and attrition.  If it’s a recurring revenue client, the schedule will include upsells, downsells, price changes and special billing adjustments.

•  Sales Funnel – includes the value of the current prospect pipeline, active leads, leads closed and close ratio.

•  Gross Profit by Customer – current month and YTD ranked by the most to least profitable.

•  Gross Profit by Product or Service – current month and YTD ranked by the most to least profitable.

•  Inventory utilization – ranked by high extended dollars to low extended dollars with days’ supply and date last sold or used.

•  Employee utilization – estimates of load, capacity and next hire point with ranking of top to low performers.

•  Product Roadmap Summary – includes products in development, target launch and status.

Until next time,Greg Leiser, Pro Back Office Consulting CFO

The next blogs in this series will cover the Financial Plan and the Operational Process Improvement Initiatives document.

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Gregory Leiser
Pro Back Office Consulting CFO
Greg is a seasoned financial manager and wingman for the CEO with over 20 years of experience, with much of that in manufacturing companies. Specialization in enhancing enterprise value by implementing operating process improvement initiatives, developing business plans based on financial metrics, utilizing performance measurement reporting systems and providing guidance through business transformation and transactions. Certified Public Accountant. Greg is a member of Howard's Team, a large group of cyclists that raise funds for the National MS Society primarily with an annual 150 mile two-day cycling event each October.
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