There are many management practices to run a business smoothly. This includes proper financial management. Monthly review of the financial performance of the organization is an important part of the overall management system.
There are many advantages of a regular and periodical review,
1-Regular update of the profitability or otherwise, rather than surprises at end of the year,
2-Timely insights for decision making, proactive corrective actions,
3-Monitoring of the performance against budgets / targets,
4-Data for costing / quotation,
5-Tax planning.
It is important that review is being done however at the same time it is also equally important what is being reviewed. An easy to follow as well as comprehensive agenda for the monthly financial review should include,
Profit & Loss Statement – For the Month and Year to Date (YTD)
Balance Sheet – As on Month-end and Last BS date
Cash Flow Statement – For the Month and Year to Date (YTD)
Overheads Analysis – For the Month and Year to Date (YTD)
Employee Cost Analysis – For the Month and Year to Date (YTD)
Term Loans Statement – As on Month-end and Last BS date
Stock Statement – As on Month-end and Last BS date
Debtors Schedule – As on Month-end and Last BS date
Creditors Schedule – As on Month-end and Last BS date
Fixed Assets Additions – For the Month and Year to Date (YTD)
This is a minimum suggested agenda. For a better comparison and understanding of trends, previous month / previous year / budget figures can be included. Notes as per requirement to explain variances and major heads / numbers will enhance the quality of reporting.
