There are few reports form Tally accounting software which helps a business owner to get a real picture of his business. These reports are very important when it comes to understanding your business, preparing the projections for next 3 months and for taking important decisions.

Cash flow Report:

Cash flow Report is the report I give more importance than the Profit & Loss Account as well. The reason is this is the report which shows the actual inflow and outflow of cash, means the total hard cash received and the amounts paid, which will even include the loans given and repayment received along with its breakup. This report helps you understand how much money you have received from you debtors so that you get an actual understanding of amount received when compared with your sales. Business showing a profit of 10 Lakhs in the book does not mean you have that much in your bank account. Cashflow helps you understand that gap and it shows the right picture where is your money lying.

Profit & Loss Report

Who does not know about this report? However actual analysis can be done when you check monthly Profit & loss statement and compare it with the previous months. Here you will understand when did your sales dip, why it dipped, which expenses you need to control, what is the actual inventory in your books. So, ensure that you check this report not to see profit but understand your month on month sales and project for next 3 months.

Ageing analysis

This is the report which helps you understand the repayment of your debtors as per their credit period so that you can make the necessary follow up. To get a correct report, ensure the credit period of the debtors is entered correctly in the software.

Inventory

Check the inventory actually available with you and frame a system to ensure that you always have up to date and correct inventory recorded in your accounting software. This ensures that you have the correct picture of your profits as little variation in the stock can shoot up the profit or reduce it drastically.

Ratio analysis

Ratio analysis report is very important to understand how much is your working capital to your total asset. You get many important ratios here, which can help when you look for bank funding.

Outstanding report

Always check this report so that you have the money in your bank account. Ensure that your team do the correct follow up as per this report. There is no point in having an increased turnover but no inflow in you bank account. This report should always be checked on timely basis.

Conclusion:

There are many reports which should be checked. However, the above reports, helps the management in taking important business and strategic decisions like if they are planning to increase their marketing budget, or thinking of hiring a new staff or buying machinery or setting up a new vertical or even thinking of taking a loan. These reports give you a clear cut understanding your funds.

Author Bio

Qualification: CA in Practice
Company: Makwana Sweta & Associates
Location: Mumbai, Maharashtra, IN
Member Since: 20 Aug 2017 | Total Posts: 62
A qualified Chartered Accountant with over 4 years of rich experience in Company Law, Audits, Accounts & taxation. She is a writer at her own blog https://insights.caswetamakwana.com/. She is keen in streamlining business accounts of the Company and provide Startup consultancy. View Full Profile

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