Managerial Accounting Reports
Writen by Eddy Hood
Accounting reports are a crucial part of making sure you have a complete picture of how your business is performing. A comprehensive accounting report should be produced every quarter to give you a holistic view of your business's finances. This is especially critical for small business owners, who can derive important strategic insights from these crucial documents.
Accounting Reports and the Health of Your Business
While there are many different kinds of reports that are valuable for protecting a business, managerial accounting reports can be thought of as the most important for a small business leader. This is a type of accounting report that helps you analyze the performance of your business.
There are several different kinds of managerial accounting reports you should develop regularly:
- Budget Report: The budget report is perhaps the most fundamental report in managerial accounting. It helps business owners understand and control costs across the enterprise, whether it's a unified organization or has several departments. By evaluating expenses in prior years, it becomes possible to estimate budgets for the following year and find places to cut costs.
- Accounts Receivable Aging Report: This type of report is crucial for any business that offers credit to consumers. It provides an overview of credit balances according to age, typically including separate categories for items that are 30, 60, and 90 days late. This can help adjust credit policies to align them with consumers' repayment capabilities.
- Job Cost Report: Job cost reports provide a side-by-side view of the total cost accrued in a single project compared to the expected revenue yielded by that project. This report helps leaders evaluate the profitability of specific types of jobs and optimize their operations by focusing on the jobs that are typically the most profitable overall.
- Inventory and Manufacturing Report: Companies that produce physical products, especially those in manufacturing with a low fault tolerance, find these reports very valuable. They help centralize data on inventory costs, labor, and other forms of overhead involved in the production process, providing raw data to optimize assembly or machining.
No matter what type of business you may be involved in, the right kind of financial accounting reports can help you achieve your goals more effectively. Accounting, reporting, and other functions can give you a sense of the state of your business's finances and can provide insights that can help you capture opportunities in the marketplace.
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Learn More About Small Business Accounting:
- Virtual Bookkeeping for Your Business
- Tax Preparation for Small Businesses
- Complete Textbook on Managerial Accounting (PDF)