QuickBooks reports don’t just show your numbers—they tell a story. Regularly reviewing these reports helps you understand your cash flow, identify patterns, spot financial red flags, and strategically plan for the month ahead.
Think of it as your monthly financial check-up. When you check these specific reports, you’re not just looking backward at what happened—you’re preparing for long-term success.
Now, let’s look at the five essential QuickBooks reports you should prioritize each month.
1. Profit and Loss Report
Also called the income statement, the Profit and Loss (P&L) report is your business's financial heartbeat. It provides an overview of your income, expenses, and net profit (or loss) over a specific period.
Why It’s Important
The P&L report is invaluable for understanding how your business is performing. It shows whether you’re earning enough revenue to cover your expenses and still turn a profit.
How to Use It
- Compare monthly P&L figures to spot trends (e.g., declining revenue or rising expenses).
- Identify areas where you might need to cut costs or increase pricing.
- Use the net profit figure to assess whether you're meeting profitability goals.
Where to Find It in QuickBooks
QuickBooks Online > Reports > Profit and Loss
2. Balance Sheet Report
Your balance sheet provides a snapshot of your business’s financial health by outlining your assets, liabilities, and owner’s equity.
Why It’s Important
The balance sheet offers insight into what your business owns vs. what it owes. This helps you understand your financial stability and ensures you’re not over-leveraged.
How to Use It
- Monitor your current ratio (assets vs. liabilities) to ensure you have enough liquidity to cover short-term obligations.
- Track debt levels and assess whether your business is too dependent on borrowed funds.
- Identify changes in equity month-over-month to gauge growth.
Where to Find It in QuickBooks
QuickBooks Online > Reports > Balance Sheet
3. Accounts Receivable Aging Report
The Accounts Receivable (A/R) Aging Report tracks which customers still owe you money and how overdue their payments are.
Why It’s Important
Cash is king, and this report ensures your customers are paying their invoices on time. Without managing your receivables, delayed payments could lead to cash flow issues.
How to Use It
- Follow up with customers who have overdue invoices.
- Offer early payment discounts to encourage timely payments.
- Identify patterns of late-paying customers and reassess their credit terms.
Where to Find It in QuickBooks
QuickBooks Online > Reports > Accounts Receivable Aging
4. Cash Flow Report
Staying on top of your cash flow is critical for survival and growth. The Cash Flow Report in QuickBooks shows the movement of cash into and out of your business over a specific period.
Why It’s Important
Your business can turn a profit and still run out of cash. This report ensures you’ve got enough on hand to meet your obligations, like payroll, rent, or vendor payments.
How to Use It
- Break down cash inflows (customer payments, loans, investments) and outflows (expenses, loan repayments, etc.).
- Plan for large upcoming expenses like tax payments or inventory restocks.
- Assess whether your business is at risk of cash shortages.
Where to Find It in QuickBooks
QuickBooks Online > Reports > Statement of Cash Flows
5. Expense Report
An in-depth look at where your money is going is essential for managing and reducing business costs. The Expense Report in QuickBooks provides a detailed breakdown of spending by category.
Why It’s Important
Tracking expenses helps you identify wasteful spending and control costs to increase profitability.
How to Use It
- Spot unnecessary expenditures to cut (e.g., unused software subscriptions).
- Keep an eye on major cost categories like payroll or rent.
- Benchmark your expenses to ensure they align with your budget.
Where to Find It in QuickBooks
QuickBooks Online > Reports > Expenses by Vendor Summary
Pro Tips for Getting the Most Out of QuickBooks Reports
Here are a few extra tips to help you maximize the value of these QuickBooks reports for your business.
- Set Report Alerts: Use QuickBooks’ automated alerts to remind you to review these reports monthly.
- Compare Periods: Analyze month-over-month and year-over-year changes to uncover trends.
- Customize Reports: Tailor the reports to your business by adding, rearranging, or filtering data.
- Share with Your Accountant: Collaborate with your accountant or bookkeeper to interpret the data and create a strategic plan of action.
Gain Financial Clarity with Monthly Insights
By reviewing these five critical QuickBooks reports every month, small business owners can maintain financial clarity, prepare for future challenges, and seize opportunities. These insights empower business owners to make informed decisions that drive growth and profitability.
If you’re feeling overwhelmed or unsure where to start, SD Mayer & Associates can help. As financial strategists and trusted advisors, we can guide you through the process, ensuring your business stays ahead of the curve.
Streamline your financial workflows and gain deeper insights into your numbers—contact us today to learn more about our services or speak to one of our experts.
SECURITIES AND ADVISORY DISCLOSURE:
Securities offered through Valmark Securities, Inc. Member FINRA, SIPC. Fee based planning offered through SDM Advisors, LLC. Third party money management offered through Valmark Advisers, Inc a SEC registered investment advisor. 130 Springside Drive, Suite 300, Akron, Ohio 44333-2431. 1-800-765-5201. SDM Advisors, LLC is a separate entity from Valmark Securities Inc. and Valmark Advisers, Inc. Form CRS Link
DISCLAIMER:
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. The services of an appropriate professional should be sought regarding your individual situation.
HYPOTHETICAL DISCLOSURE:
The examples given are hypothetical and for illustrative purposes only.
