Running a business means making dozens of financial decisions every week—often without the complete picture you need. As a business owner, you're probably familiar with that nagging uncertainty: Is there enough cash to cover next week's expenses? Are customers paying on time? Where exactly is the money going?
The right internal reports turn that uncertainty into clarity. They show you what's really happening with your money so you can make confident decisions about hiring, inventory, and growth. This guide covers the nine essential reports that give you control over your cash flow, profitability, and financial health.
The 9 Reports Every Small Business Needs
1. Profit and Loss Statement
Your P&L shows whether your business is actually making money—not just moving it around. It breaks down revenue minus expenses over a specific period, revealing your true profitability.
But here's where it gets useful: your P&L also shows gross margin (revenue minus direct costs) and net margin (what's left after all expenses). When your gross margin drops from 45% to 38%, that's a signal that either your costs are rising or you're discounting too heavily. When net margin shrinks while gross margin stays steady, overhead is eating into your profits.
Watch these numbers monthly. A declining gross margin often points to supplier price increases, material costs creeping up, or pricing that hasn't kept pace with your costs. Catching these trends early gives you time to renegotiate with vendors or adjust your pricing before margins erode further.
2. Cash Flow Statement
Profit doesn't pay the bills—cash does. Your cash flow statement shows where money actually comes from and where it goes, organized into four activities: operations (day-to-day business), investing (equipment, assets), financing (loans, owner contributions), and changes in working capital.
This report answers the question every business owner asks: "We're profitable on paper, so why is the bank account empty?" Usually, the answer is timing. You might be profitable but cash-poor because customers pay in 45 days while you pay suppliers in 15.
Here's how to use this report: If operating cash flow consistently runs negative while you're showing profit, dig into your receivables. You may need to tighten payment terms or follow up on overdue invoices. If investing activities drain cash quarter after quarter, make sure those equipment purchases are actually generating returns.
3. Accounts Payable Aging Report
This report groups what you owe by how long you've owed it—current, 30 days, 60 days, 90+ days. It's your early warning system for cash crunches and vendor relationship problems.
When payables start stacking up in the 60+ day columns, you're either running low on cash or your payment process needs attention. Either way, you want to know before vendors start calling. Track your Days Payable Outstanding (DPO) monthly. Rising DPO might mean you're stretching payments strategically—or it might mean cash is tighter than you realized.
4. Accounts Receivable Aging Report
The flip side: money owed to you, organized by how overdue it is. This report shows you exactly who owes what and for how long.
Your Days Sales Outstanding (DSO) tells you the average time between invoicing and getting paid. If DSO climbs from 32 days to 47 days over a few months, your cash flow is about to feel it. That's your cue to review which customers are slow-paying and whether your collection process needs work.
Customers in the 90+ day column deserve immediate attention. The longer an invoice sits unpaid, the less likely you'll collect it.
5. Budget Variance Report
This report compares what you planned to spend versus what you actually spent. It sounds simple, but it's one of the most actionable reports you can run.
Significant variances—say, spending 40% over budget on contractor fees—need explanation. Sometimes there's a good reason (you landed a big project that required extra help). Sometimes it reveals spending that crept up without anyone noticing. Either way, you want to know.
Monthly variance reviews help you catch overspending before it becomes a pattern and keep your projections realistic. When your budget consistently misses reality by wide margins, your forecasts aren't helping you make decisions—they're just guesses.
6. Cash Flow Forecast
While your cash flow statement shows what happened, your forecast shows what's coming. It projects expected inflows and outflows so you can see potential shortfalls before they arrive.
Build your forecast using your AR aging (when you expect to collect), your AP aging (when bills come due), and any recurring revenue or expenses. A 13-week rolling forecast gives you enough visibility to plan for seasonal dips, large purchases, or growth investments.
When the forecast shows a cash gap in six weeks, you have time to line up financing, accelerate collections, or delay discretionary spending. When you discover the gap the week it hits, your options are a lot more limited.
7. Revenue by Customer and Product Report
Knowing where your revenue comes from reveals both risks and opportunities. This report breaks down revenue by your top customers and by product or service line.
If three customers account for 60% of your revenue, you have concentration risk. Losing any one of them would be a major hit. That's not necessarily a problem—but it is something to know and plan around.
On the product side, this report shows which offerings actually make you money. You might discover that your highest-revenue service has the thinnest margins, while a smaller offering is far more profitable. That kind of insight helps you decide where to focus your time and marketing dollars.
8. Expense Report by Category
This report breaks down spending into categories—labor, rent, software, professional services, materials—so you can spot trends and control costs.
Growing businesses often experience "subscription creep" where software tools, contractor fees, and service costs pile up as teams expand. Monthly category reviews catch spending that grows faster than revenue. Platforms that categorize expenses automatically save your team hours of manual sorting and make this analysis faster and more reliable.
9. Key Performance Indicator Dashboard
Your KPI dashboard pulls the most important numbers into one view so you can check your business health at a glance. Include current cash balance, revenue versus budget, gross and net margins, DSO and DPO, current ratio (current assets divided by current liabilities), and revenue per employee.
Think of this as your business vital signs. You don't need to dig into detailed reports every day, but you do want to know quickly if something's off. When margins start slipping or DSO creeps up, that's your signal to pull the detailed reports and figure out what's driving the change—whether it's a pricing issue, a collection problem, or costs that need attention.
Getting Started
If you're just building your reporting routine, start with four essentials: cash flow statement, profit and loss, accounts payable aging, and accounts receivable aging. These give you the visibility you need for day-to-day cash management and confident decision-making.
Generate your P&L within five business days of month-end while the data is still actionable. For cash flow, check in weekly rather than waiting for monthly reports—especially if cash runs tight.
Ready to stop piecing together financial reports from multiple sources? Relay's business banking platform gives you real-time visibility across up to 20 purpose-built accounts, with the reporting you need to track cash flow, aging, and expenses in one place. Get a demo to see how Relay works.
Relay is a financial technology company and is not an FDIC-insured bank. Banking services provided by Thread Bank, Member FDIC. FDIC deposit insurance covers the failure of an insured bank. Certain conditions must be satisfied for pass-through deposit insurance coverage to apply.
