Financial reports and analyses are a crucial aspect of any company’s operations, providing vital insights into the financial performance and stability of the business. To help finance teams make informed decisions and grow their companies, it’s important to review accounting data and create meaningful financial reports and analyses. In this article, we will be discussing 10 such reports and analyses that every finance team should consider when reviewing their accounting data.

Profit and Loss Statement by Cost Type: This report provides a detailed breakdown of the costs incurred by a company, classified into different cost types. By understanding the cost drivers, finance teams can identify areas for cost optimization and improve financial performance. You can learn more about what cost types are here.

Balance Sheet: A balance sheet provides an overview of a company’s financial position at a specific point in time. By reviewing assets, liabilities, and equity, finance teams can assess liquidity, solvency, and financial stability.

Cash Flow Statement: The cash flow statement provides information about the inflow and outflow of cash within a company. By understanding the sources and uses of cash, finance teams can evaluate a company’s ability to generate a positive cash flow.

Monthly Controlling Report: A controlling report typically compares last periods (months, quarters, or years) actual performance to the budgeted, planned or forecasted performance. This report helps finance teams identify significant deviations between actual performance and budget, allowing them to take corrective action if necessary. Ideally, such controlling reports are therefore created at least monthly, so companies can react quickly when things are not going well. Next to the actual vs budgeted performance comparison, Finance teams may also analyse figures such as monthly or quarterly growth rates, YTD views and rolling forecasts as well as comparisons to last year’s performance. This allows a company to evaluate whether it is developing in the right direction.

Profit and Loss Statement with Cost Types divided by Cost Centers: This report helps finance teams understand the costs incurred by different cost centers within a company. By breaking down costs by cost center, finance teams can identify areas of high costs and target cost reduction initiatives where necessary. Typically, companies have budget owners for each cost center. Hence, when costs increase in one particular cost center, management can react and discuss with the relevant budget owner why this happened. You can find out more about cost centers in this article.

Revenue by debtors / customers: This report provides insights into the revenue generated by different debtors or customers. By reviewing revenue by debtor, finance teams can identify key accounts which may need special attention by the sales and customer success teams. Moreover, they can group certain debtors together and assess the performance of different customer segments and make informed decisions about future sales and marketing initiatives.

In SaaS business in particular, the revenue by customers report is typically part of a larger topline report, which also includes key metrics such as monthly recurring revenue (MRR), annual recurring revenue (ARR) as well as churn. MRR and ARR provide valuable insights into the recurring revenue generated by a company and can be used to predict future revenue growth. Churn, on the other hand, measures the rate at which customers are cancelling their subscriptions, providing insights into customer satisfaction and the health of the business.

Costs by creditors / suppliers: This report provides insights into the costs incurred by different creditors or suppliers. By reviewing costs by creditor, finance teams can assess which suppliers are most important to the company and can thereby make informed decisions about future procurement initiatives. For example, if one supplier is particularly large, or perhaps so large that the company is completely reliant on him, procurement may want to look for a second supplier of that good or service in order to decrease its reliance and to increase its bargaining power.

KPI Report: Finally, finance teams typically summarise the above reports in a short KPI (key performance indicator) report which includes thde most important metrics. These metrics are typically included in what is called a “data story”: here, the finance team provides context on the numbers, explaining why the performance was the way it was. This KPI report is typically provided to management and investors.

Finance teams play a critical role in ensuring the financial stability and growth of a company. By creating and reviewing meaningful financial reports and analyses, they can make informed decisions, improve financial performance, and ensure long-term success. Whether you’re a mid-market company or a start-up, incorporating these reports into your financial reporting processes is essential for business success. By understanding the importance of financial reports such as profit and loss statements, balance sheets, cash flow statements, and more, you can take your company to new heights.

Moreover, these reports highlight the finance team’s role at the heart of the company. Finance is not one isolated business unit of number crunchers, instead it interacts with the entire business across its profit and costs centres and its insights can lead to more effective sales, marketing and procurement strategies, among others.

In practice, however, the image of the “number cruncher” persists, when Finance really should be a business partner. This is partially the case because Finance teams often lack the tools to stay in top of their numbers and therefore have limited time to actually derive strategic recommendations. Building these reports manually takes time: typically, it involves a lengthy data gathering process and lots and lots of spreadsheet tabs and formulas. And after the reports are created, the real work starts: delivering the insights generated to management and generating meaningful actions where they are required. Typically, by the time the reports are only completed and ready to share, they are already outdated. Moreover, management typically does not have time to look at individual spreadsheet tabs, making an effective data story all the more important. This, however, requires additional work.

Enter: Pectus. Pectus is a reporting, controlling and forecasting tool with which you can create all of the above mentioned financial reports and analyses within minutes, with all the required data directly available through API integrations with your most important systems. To find out more, feel free to book a demo and we can get you started with a free trial.