Start with your decisions
Before anyone builds a chart, work out what you need to decide each month. A clothing brand might need margin by sales channel and how long stock has been sitting. A builder needs the cost to finish each job and when retentions will come back. A consultancy needs to know who’s busy, who isn’t, and which clients are slow to pay. Answer those questions first. Anything that doesn’t help you decide something can wait.
Results with the reasons
You need the profit and loss, a sensible comparison such as last month, last year or budget, and a few lines explaining what moved. Were sales up because you sold more, charged more or sold a different mix? Is a cost higher because it really went up, or because two months of invoices landed together? If a figure is still an estimate, the pack should say so.
Profit and cash side by side
A good month on paper can still leave less in the bank. The pack should show where the money went: unpaid customer invoices, stock, work in progress, new equipment, or a VAT or payroll bill. It should also show what’s already committed for the next few weeks. This is where the balance sheet earns its place, because it explains the gap between profit and cash.
Finish with next steps
Every pack should end with a short list: what’s being looked into, who’s doing it and by when. At the next monthly meeting, start with that list. It’s what turns a set of reports into something that changes how the business runs, rather than a document that gets filed and forgotten.
Example: a homeware shop has its best month for sales, but the bank balance is lower than it was four weeks ago. A bigger sales chart won’t explain that. A useful pack shows the cash sitting in two large trade invoices that haven’t been paid, a stock order for Christmas and the quarter’s VAT. It then shows what’s due out next month, so the owner can decide whether to chase the invoices or hold back the next stock order.
How to tell it’s working
You can read the pack in twenty minutes and know what happened, why it happened and what you need to decide next. Your questions are answered in the pack itself, not in a chain of emails afterwards. And the same few problems stop turning up month after month with nothing changing.
What to check
- Why sales, margin and overheads moved
- Where the cash went this month
- What’s already committed next month
- Which figures are still estimates
- Who’s following up each action, and when
Where to start
Look at your last pack and write down three decisions it didn’t help you make. That list is the brief for a better one.