Introduction
Your general ledger software is a veritable gold mine of raw financial information. However, this data only becomes useful once it is converted into simple, clear and actionable information. Enter reporting at this point. The reports that your GL software generates is the story of your business- where it has been, where it is today and where it is going to be tomorrow.
In contrast to tedious calculation of spreadsheets, modern GL software automatically generate not only standard but also a range of custom reports with just one click. Now let us look at the central reports that ensure intelligent tutoring of business.
The Three Core: Key Financial Statements
These are the reports that cannot go away if you want to see the full financial health of your company.
The Balance Sheet (statement of financial position)
Description: Your balance sheet shows a single moment in time of what your company owns and what it owes.
What it depicts: It is an embodiment of the accounting equation: Assets = Liabilities + Equity
Why it matters: Shows you what you have, what you owe, and what is left over (Assets, Liabilities, and Equity) Important for determining liquidity, solvency, and the total value of the business.
Profit and Loss statement or income statement
What it is: An overview of the income and expenditures of your business for a specific period of time (typically a month, quarter, or year).
What it tells us: Revenue — Expenses = Net Income (or Loss)
Why it matters: This is the final report card on profitability. It indicates if your operations are profitable, what product or service lines are performing the best, and where you are incurring expenses.
The Statement of Cash Flows
What it is: A statement that explains how cash and cash equivalents are impacted by changes to the Balance Sheet and Income Statement.
What it reveals: Cash activity is classified into three sections: Operating, Investing, and Financing sections.
The big deal: Cash does not equal profit. This report shows how capable your business is of generating cash which is vital to meeting financial commitments, paying your employees and funding growth. Provides the key answer to"Where is the money from and where did it go?"
Not Just The Basics: Comprehensive Management And Analytic Reports
With a strong GL you can dig deeper with reports that can help with both day-day management and strategic direction.
General Ledger Trial Balance: This report breaks down each account in your chart of accounts into its current debit or credit balance. The bulwark for balancing your books prior to closing an accounting period.
Accounts Receivable Aging Report: provides insight into which customers owe you money and for how long — essential for managing and collecting debts and managing cash flow.
Accounts Payable Aging Report: This report shows you how much you owe your suppliers and when the payables are due, and makes it easier for you to manage cash outflows and avoid late fees.
Departmental or Project Profitability Reports: If you have divisions set up in your general ledger (GL) with dimensions, you can print P&L for different departments, projects, or locations to identify the strengths and weaknesses of your business.
Budget Vs Actual Reports: This report gives you a comparative glance at your forecasted budget and your actual income and expenses, including where the variances are which need to be managed.
The Intersoft ERP Advantage: Reporting Is Integrated and Real-Time
Reporting is not a distinct, month-end exercise with Intersoft ERP. Since our general ledger is native with all other business modules (sales, inventory, procurement), your financial reports are always live and represent the untouched status of your business.
You can monitor important metrics from these reports by leveraging dynamic dashboards from our software for a snapshot of financial health. Additionally, by eliminating IT dependencies, you can generate customized, in-depth reports that will give your finance team the ability to seek the answers they need, just in time for when they need them.
Conclusion
It is the reporting capabilities of your general ledger software which take it from simple record-keeping tool to a strategic command center. With accurate financial reports along with deep-dive analytic reporting available at the push of a button, you have the clarity and confidence required to lead your business, keep stakeholders happy and ensure a profitable future.