Monthly financial reporting is a comprehensive summary of your business's financial activities over a 30-day period, including revenue, expenses, cash flow, and key performance metrics. This practice helps small businesses track performance, identify issues early, and make informed financial decisions.
Whether you're chasing investors, managing cash flow, or planning for growth, monthly reporting keeps your business grounded in facts—not guesses. Analyzing your finances every 30 days makes a huge difference in how well you can manage every dollar you bring in and owe.
In this article, you’ll learn:
- What monthly financial reporting includes and why it matters
- Essential components every monthly report needs
- How monthly reporting prevents costly financial mistakes
- Common pitfalls and how to avoid them
Monthly financial reporting TL;DR
- Monthly reporting looks at the revenue, expenses, debts, assets, and cash flow you have each month.
- Having insight into those numbers is essential for planning, forecasting, and spotting errors and opportunities early.
- Financial report findings give shareholders, potential investors, and lenders a clear understanding of your business's current performance and future financial projections.
What is monthly financial reporting?
Simply put, monthly reporting is a summary of your financial activities for the last 30 days.
Compared to quarterly financial reports, these provide a more up-to-date view of your finances for stakeholders and investors. Seeing the state of your finances on a monthly basis also lets you spot issues and pivot to resolve them sooner.
Your typical monthly financial reporting package includes:
- Standard financial statements
- Supporting documentation
- Financial KPIs
Let’s break down what that looks like.
What to include in monthly financial reporting?
The last thing you want is to deliver a monthly financial report that's missing key components. When producing month-end reporting, make sure you have these three key categories covered.
1. Core financial statements
Just like quarterly reports, monthly reports, at the very least, should include your standard financial statements that detail your financial operations.
For each reporting period, these include your:
- Balance sheet — A summary of your overall financial health, including the money you have, the money you owe, and the value of funds your shareholders have invested in.
- Income statement — An outline of the money you’ve earned and the money you’ve spent running your business.
- Cash flow statement — A rundown of the cash you brought in and the cash that left your accounts.
2. Supplement reporting
Once you have your core statements ready, it’s a good idea to provide your stakeholders with a few additional reports to broaden their understanding of your financial health.
These can include:
- Budget vs actual — Compare how much budget individual departments used compared to what you allocated for the month.
- Project and departmental projections — Predict how you see certain projects or teams spending or bringing in revenue in the future.
- Financial KPIs — Show how your financial activity measures up to performance indicators like net burn, cash runway, revenue growth and contributes to larger goals. (Use a financial KPI dashboard to easily access this data.)
3. Supporting details
Lastly, provide a few final details that tie everything together and address any lingering questions.
- Bank reconciliations — Pull statements from the previous month to prove that banking activity matches your financial records.
- Performance metrics — Provide data points that can be used to provide context or analyze performance.
Why monthly financial reporting matters
You’re not just pulling month-end reporting for fun. Monthly financial reports are particularly beneficial for startups and small businesses since monthly insights help:
- Manage runway
- Track burn rate
- Prepare for fundraising
How does that play out in reality? Glad you asked.
1. Keep your business on track
Monthly financial insights give you a clear view of how your business is performing. That makes for:
- Accurate expenses — Make sure your payroll and taxes are accurate and on time.
- Stronger spend management — Monitor income and expenses to better allocate budget and pay off liabilities.
2. Spot and fix issues sooner
The longer you wait to understand your finances, the longer issues go unaddressed and your business suffers.
With monthly financial reports, you can address revenue and cash flow problems faster and adjust financial operations in 30 days, not three months.
3. Ditch guesswork in decision-making
No insight means you’re flying blind when it comes to business decisions. Monthly reports combat that by providing the financial data you need to understand seasonal trends and bottlenecks and improve financial operations.
4. Boost transparency and accountability
Delivering data on your monthly financial activities to shareholders and potential investors shows them that you have nothing to hide.
That transparency shows them you own your finances, good or bad. Plus, that trust can help strengthen relationships and open doors for additional funding.
5. Maintain compliance + taxes
Financial reporting outlines the processes your organization uses to comply with federal and state accounting regulations. Pulling monthly reports:
- Verifies that you’re following all tax legislation and financial reporting standards
- Allows for seamless tax valuation and auditing processes
Curious how you can use monthly reports to make that all happen? We’ve got the how-to here.
Bonus: You can even automate your monthly financial reports to make life easier!
Common monthly financial reporting mistakes to avoid
When you’re putting together your financial reports, there are a few common traps that you could fall into.
1. Skipping reporting during busy season
Sure, it might seem like you’re too busy to pull monthly financial reports when you’re pulling more business. Except that’s when you need them most!
Stay on schedule with your reporting, no matter the time of year—or automate them so they’re done for you.
2. Using poor financial data
Your reports are only as good as the data that feeds them. Make sure you’re plugging in accurate, complete financial data into your reporting tools. (PS: Real-time accounting is your best bet for making that happen.)
3. Focusing only on revenue
Revenue is not the only sign of financial health. You should also keep an eye on your cash flow, forecasts, and profit margins.
FAQs about monthly financial reporting
Q: Why can’t I just report finances on a quarterly basis?
Technically, you can. However, if you’re unknowingly dealing with cash flow, revenue, or other financial problems, you’ll have to wait an entire three months until your quarterly report brings them to light.
Q: When should I switch to monthly financial reporting?
Yesterday. No, really. It’s never too early or too late to move from just quarterly to monthly financial reporting.
Q: How long should it take to close the month?
Typically, you should be able to pull month-end reports no more than 10 days after you close your books. But, if you use real-time accounting software, you can close the month in seconds any time you want!
Q: Is monthly reporting required by law?
No. There are no federal or state laws that require you to report on your finances every month. However, lenders, investors, and board members will want to see those numbers more frequently.
Monthly financial reporting is a must, not a maybe
We get it—“more reporting, more often” sounds like a nightmare when financial reporting already ranks near the bottom of your to-do list. But trust us: checking in every 30 days doesn’t just help you manage what’s coming in and going out—it gives you actual control over your business (and maybe even your sanity).
At Hiline, we’re here to make monthly reporting less painful and a lot more powerful. We don’t just “do the books”.
Our tech-enabled accounting team plugs right into your business, giving you expert-level financial insights without the in-house price tag. We pair cutting-edge tools with real humans who actually explain your numbers—and help you use them to grow.
You didn’t start a business to spend your days knee-deep in spreadsheets. So don’t. We’ll handle the finances. You go build something incredible.
Contact us today to get started.
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