A finance lead in a larger company reads the same set of figures every month and asks the same set of questions. A business that does not employ one can do the same with a short, consistent pack drawn from the closed books. This note describes what such a pack covers and what it is looking for.
1. Revenue and margin
The first page compares revenue and gross margin with the previous month, the same month last year, and the budget. The question is not whether sales went up. It is why the margin moved: price, mix, discounts, or the cost of what was sold.
- Revenue by product line, customer group, or branch
- Gross margin percentage and the cause of any change
- Returns, credit notes, and discounts as a share of sales
2. Operating costs
Costs are grouped by behaviour: those that move with sales, and those that do not. Fixed costs are compared with the budget. Variable costs are compared with revenue. The aim is to find costs growing faster than the business, and costs that are due to timing rather than a real change.
3. Receivables
An ageing of customer balances shows where cash is stuck. The pack lists the largest overdue balances and the oldest items, with the number of days of sales outstanding. A rising figure is read as a collection issue until shown to be something else.
4. Payables and commitments
The same exercise for suppliers: what is due this month and next, which payments are contractual, which are discretionary, and what is overdue. It also lists commitments not yet in the books, such as orders placed and capital expenditure approved.
5. Stock and working capital
For a business that holds stock, the pack shows stock by category, days of cover, and slow-moving items. Working capital, the net of receivables, stock, and payables, is tracked against sales. If it grows faster than sales, the business is financing its customers or its stock from its own cash.
6. Cash
The cash page shows the opening balance, receipts, payments, and the closing balance, followed by a forecast for the coming weeks. It includes dated items that are easy to miss: advance tax, GST payments, payroll, loan instalments, and the tax deducted at source that has to be deposited.
7. Debt and covenants
Where the business has loans, the pack shows balances, interest cost, the next repayment, and any conditions in the sanction, such as ratios the lender tracks. A ratio close to a limit is flagged early.
8. Compliance calendar
A one-page list of filings and payments falling in the next 30 to 60 days, with the person responsible and the status of the papers. Dates are confirmed against official notifications, because they can change.
9. Decisions needed
The last page is short. It lists what the reader of the pack needs to decide or approve, and the figures that bear on each decision. If nothing needs a decision, it says so.
What the pack depends on
The pack is only as reliable as the books under it. If bank reconciliations are open, stock is not counted, or the month has not been cut off, the figures are provisional and the pack should say so. This is why monthly reporting is built on a disciplined close; see the month-end close checklist.
Records to keep ready
- Closed trial balance and ledgers for the month
- Debtor and creditor ageing lists
- Stock listing and the latest count
- Loan statements and sanction conditions
- The budget and the previous month’s pack