3 Must-Have Tracking Reports to Ensure Profit


Lisa’s Foreword:

Numbers have never been my strong suit. I’m more of a right-brainer. But as my business has grown I have had to learn to understand, record, and track certain things dealing with numbers in order to make sure I was keeping my business legal in the eyes of the “tax collectors” as well as ensuring I was staying profitable.

I tried a few other people’s systems for tracking my #s but found them more complicated than helpful and never kept up with them. Thankfully, 2 years ago, I designed my own excel spreadsheet that has worked very well for me, and each year I have tweaked a few things to make it even more helpful. Now I share this template with my private clients so they can have a simple tracking system that will be likely to work for them.

Today I ran across an article from Tracey Lawton, which explained this concept very well. And because it is such an important element of running a serious and profitable business, I decided to postpone the post I was going to share today so I could pass Tracey’s information on to you this week. 

Okay, I’m going to dive right in to one of the biggest problems for many solopreneurs, and one that quite likely will keep them awake at night … finances!

Creating a robust financial management system is THE essential system for your business – after all it’s the one system that will show you:

  • if your business is making a profit;
  • if you can afford to make an investment in a program or product;
  • if you can take advantage of an opportunity as it arises; or
  • if you can take a salary (also known as Owner’s Draw) at the end of each month.

If you don’t know where you are financially in your business then you are very quickly going to get into a sticky situation. Today I’d like to share with you three essential reports you need to run on a regular (read: monthly) basis to ensure that your finances stay healthy.

1. Income Analysis: This is a very simple report that you can set up using a spreadsheet that tracks your monthly income. This is money you receive into your business from clients, products, programs, affiliate commissions – in fact, any income that you receive as part of your business activities you need to list in this report.

Set up your report so that you monitor the whole year on one spreadsheet, broken down month by month. And also categorize your income so that you can see where your biggest income streams are.

2. Expenditure Analysis: The flip side to the Income Analysis is the Expenditure Analysis and, again, you can set up a spreadsheet that will track this for you. Like the Income Analysis you’ll want to be able to see the whole year at a glance, and have it broken down month by month. You’ll also want to be able to see where most of your money goes too – your biggest expenditure items – so you’ll need to categorize your expenditure too.

Your Expenditure Analysis will contain things like your monthly list management service (e.g. 1ShoppingCart, Aweber, iContact etc.), merchant fees, shopping cart account, membership fees, advertising, website expenses etc. etc.

3. CashFlow Report: Now that you have Income Analysis and Expenditure Analysis all in place you are all set to create your CashFlow projection. Put simply, a Cashflow projection shows whether your anticipated income will be able to cover your expected (projected) expenses and this report is very beneficial to you in your business; in fact it’s a must-have!

It is an annual report and, if set up correctly, will show you how your cash will flow through your business throughout the current financial year. Again, setting up a spreadsheet so that your Cashflow is automatically calculated throughout the year is an invaluable tool for your business.

I’ve been using a Cashflow Report in my business for many years and find it invaluable. I also like to use my Cashflow Report to plan out upcoming expenses too so that I can see exactly when they’re due and how they will impact on my finances.

Not only will having a robust financial management system give you peace of mind but it will also mean that you can take advantage of opportunities immediately they arise. For example, just recently the chance to participate in a high-profile teleclass series came up, and because I have my financial systems in place, I knew straightaway that it was something I could afford take part in!