Pinch, punch, first of the month

Wow, it’s difficult to believe that we are at the start of another month. For me, that means it is time to embark on a flurry of activity, mostly designed to tell me how my business is performing. I can use all this activity to ensure I am able to make tweaks for the month ahead, put plans in place and ensure my focus is directed to the right areas.

My bookkeepingis kept pretty much up to date from day to day (of course QuickBooks helps with this as my bank transactions are picked up automatically and posted straight in). I’m therefore able to run a profit and loss account and balance sheet within a day or two of the month end so I always know exactly where I am with my business. The balance sheet (amongst other reports) helps me to know who I owe money to and determine if I need to chase anyone for payment of their invoice. The profit and loss account tells me what funds are available to be able to pay salaries and decide whether a dividend is a sensible option or even a possibility!

Another thing I do at the start of each month is compare my profit and loss account against plan, yes, I have a plan! This helps me understand what has gone well and where I need to direct my efforts for the month ahead. From running this report, I can analyse whether any variances are as a result of unexpected changes to income or costs and why they have been different to the planned figures, putting in place mitigating actions as necessary.

There are many reasons why I might not hit my forecast figures.

·There may be a piece of work that I expected to have finished but I haven’t quite got over the line or I’ve finished sooner than expected.

·I might have I finished a piece of work but forgotten to send the invoice.

·Perhaps my costs have been greater or lower than expected, there may be a good reason for it.

Whatever the reason, reviewing my business against my plan gives me a chance to plan my work for the month ahead to ensure that nothing gets forgotten.

At this point it’s also worth reviewing my forecast to ensure it is still valid and assess whether I should raise or lower my expectations. Are my goals realistic or do I need to rejig the timing of pieces of work to fit them in? At the start of the month I take time to set out my priorities and plan my activities for the month ahead to ensure I am able to meet any deadlines.

The start of the new month is also a time for me to work on my voluntary roles. I am Treasurer for Bo’ness Amateur Swimming Club for which I produce a short Treasurer's report each month. I have also recently agreed to take on the West Lothian Women in Business Treasurer post, which will bring monthly tasks with it. I also help out the local playgroup with their payroll.

And the last thing I like to include in my routine at the start of the month? As an Amazon Prime member, I make sure I download one of their free books for my kindle. There are six to choose from each month across a range of genres. Perfect for relaxing after all that analysis!

Every business is unique, so you may decide to measure other metrics of a successful business – number happy customers, hours freed up to spend with family or simply likes on your Facebook page to name but a few. Whatever you choose to include in your monthly reporting, there needs to be a good reason for doing it. There’s little point in spending precious time drafting different reports that are not going to focus you on your business priorities. If it’s not useful to you and your business, don’t produce it!

Do you have any other suggestions for things a small business should be looking at monthly? If so, pop them in the comments below!