The 5 Business Reports You Need to Make Sense of a Crazy 2020
It should be safe to say that we’ve all had enough of 2020 by now.
Between the ongoing new lockdown and the latest Brexit changes, product-based businesses like yours could still be looking at a rocky year ahead – and we could find that 2021 is only slightly better than the year we’ve just put behind us. So what’s the best way to move forward out of a difficult time?
By looking back – and learning from the challenges you’ve faced. Here are the 5 types of reports your product-based business needs:
1. Cash Flow Reports
It’s been a year of lockdowns, restrictions, and confusing consumer habits. And if you’re running a product – based business, that probably meant some huge gaping holes in your incoming cash. A proper assessment of your 2020 cash flow could help your company be more prepared in the coming months.
So what kind of tools should you be looking for to help you understand your cash flow?
If you’re using Xero, you’ll have access to the Business Snapshot feature. It’s a bit like the existing Xero Dashboard, however the Business Snapshot also shows you how your business is doing over a month, a quarter, or a year.
With a long-term analysis stretching back over 2020, you’ll be able to see exactly when your money was disappearing (and exactly when it wasn’t coming back in).
2. Profit and Loss Reports
This is a big one – and the profit and loss report should already be a bread-and-butter statement that every business relies on regularly.
But if you want the complete picture of what went wrong last year, you’ll need more than just a general overview:
You need reporting software that can show you segmented results.
You need to be able to split up your chart of accounts beyond simple totals – with a fine-detail look at the categories your sales and expenses fall under.
If you’re using Xero, you can set up Tracking Categories to help you segment your reports. And for a product-based business, filters like these are a gold mine for getting the deep insights you need to make predictions for the future.
With a segmented profit and loss report, you’ll be able to see which types of product were suffering.
3. Balance Sheet Reports
While the first two financial reports (cash flow and profit and loss) were dealing with the money moving in and out of your business, a balance sheet report is something different. It’s a snapshot in time of your assets and liabilities at a particular date – what your company owns, and what you owe to other people.
So why is that so important for 2020?
If your business has been suffering with low profits and poor cash flow, you could be out looking for new loans or investors to help you weather the storm ahead. And the balance sheet is one of the most crucial pieces of information that banks or investors will be looking for.
If you’re using Xero, you’ll have access to the new Balance Sheet Report function, with options for accrual or cash displays – as well as the ability to filter by tracking categories.
4. Operational Reports
You’ll probably need to start looking at things like:
- Aged inventory reports – How long did each product spend in storage before it was sold? (And how much did it cost you to keep it there?)
- Purchase reports – How much of each product were you buying? And how were your suppliers’ prices changing throughout the year?
- Manufacturing reports – Did your planned parts and costs match up to the reality? How often were you hitting (or exceeding) your capacity?
While the baseline financial reports are usually straightforward, these operational business reports can quickly become overwhelming – and the software you have in place might not be enough.
So to help you get a grasp on the huge level of detail and different variables, we usually recommend looking into something like Microsoft Power BI.
Power BI can give you a single place to see the visual dashboards and streamlined reporting you need to make understanding your business as simple as possible.
5. Marketing Reports
With demand for so many products dropping in 2020, businesses had to fight harder than ever to bring in new customers. And with so many businesses struggling with their cash flow, it became more important than ever to make every penny of your marketing budget count.
You’ll need to generate reports that can show you:
- Your audience reach and clicks – for your PPC adverts, social posts, or email campaign.
- Your Ecommerce traffic and conversions – for your online stores in places like Shopify or WooCommerce
- And your SEO analytics – for both your company website and your online marketplaces.
If you’re looking to get complete data on your marketing efforts, you’ll need to look into some external apps and add-ons – especially those that you can easily integrate with Power BI.
Ready for a new and improved 2021?
We’ve been helping product-based businesses to choose and use the best apps and systems for business reports for years. And a big part of that process is getting our clients set up with the right reporting tools – to give them the accessible insights they need to learn and grow.
So if you’re looking to make your business stronger than ever this year book a call with one of our experts and we’ll be happy to find out how we can help.