Key financial reports and metrics for small business

www.BetterBottomLine.com

Key Financial Reports and Metrics for Small Business

Presented by:

Scott Gregory, Creator: “Beyond QuickBooks: Making Sense of Your Numbers”


Key Financial Reports and Metrics…

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Photo courtesy of EverystockPhoto.com – danperry.com



Photo courtesy of Google Images



Photo courtesy of Google Images



Every business needs

a Scorecard

…otherwise, how do you know how you’re doing?



Building YOUR Scorecard

Start simple Beware of paralysis by analysis Forget about the “tax” issues



Building Your Scorecard

Metric #1: Cash in the Bank• Pros?• Cons?




Metric #2:Cash in the Bank

+ A/R – A/P



Building Your ScorecardMetric #2: A/R = ?



Building Your ScorecardMetric #2: A/P = ?




Metric #2: Cash in the bank + A/R – A/P• Pros?• Cons?

• Common Problems?




Metric #3: Profit Report “How did we do”?



Building Your ScorecardMetric #3: Profit Report

• Understanding it?• A major concern?




• Income• Cost of Goods (COGS)• Expenses




• A major concern beforeusing this report is?




• “But my tax guy givesme this…”

• How often?



Building Your ScorecardMetric #4: Balance Sheet

• “What I Own…”• Understanding it

• Assets, Liabilities,Equity



Building Your ScorecardMetric #4: Balance Sheet

• Is the data right?• How often?



Building Your ScorecardTaking it to the next level…

• A/R Turnover (how fast are you collecting?):

Net Sales / Average A/R




• Inventory Turnover (how fast are you moving inventory?):

Cost of Goods Sold / Average Inventory




• Average Sale per Invoice (excellent trending metric):Total Sales $ / Total # of invoices




• Gross Profit Margin: Gross Profit $ / Total Sales



Building Your Scorecard“MBA Level Stats”

Profitability by product lineDebt to equityLabor ratiosMany others…



Building Your ScorecardCreate a “Dashboard” of

YOUR Key MetricsMakes it easy to spot trends



Building YourScorecard

Real LifeDashboardExample:



You do NOT have to be an accountant to use a scoreboard for

your business** - however, you may need help initially to help ensure your

data is correct and your systems are working properly



Just like your pledge to deliver great products or services….

Make a pledge to develop and monitor your business scorecard!


12 Things Every QuickBooks User…

Questions? Comments!Scott Gregory

E-Mail: [email protected]: (440) 527-5696Web: www.BetterBottomLine.com