Are you an owner or manager who isn’t looking at your P&Ls monthly? If you are a business owner who isn’t sharing these types of financial reports with your managers you are making a huge mistake!
It is important to be on top of spending, you already know that. But if you aren’t seeing the big picture of how spending affects the yearly/quarterly/monthly budget how can you make intelligent decisions?
When looking at these reports you need to analyze why the numbers look the way they do. Did you just hire and train several people?- if so, labor would be high. Did you place an order for an item that has a high minimum order- which is something with a long shelf life and a good bulk price, so it’s worth it to store the extra product? Do you have enough cash flow to be making those types of purchases or is it better to pay a little more to get just what you need?
If you have someone running your business, it’s imperative that you spend time with them going over these reports. Make sure that manager understands how you would make these spending decisions. Make sure they understand the consequences of purchasing and scheduling choices. It is worth your time, and helps that manager better understand how you view your company and how to steer it towards success!