Financial statements are the standard reports for most businesses, but a flash report provides the greatest tool to monitor financial health.
Key Takeaways
Financial statements are the standard reports for most businesses, but a flash report provides the greatest tool to monitor financial health.
What is a flash report? It is a summary of key financial and operational metrics that details a company’s performance during a specific period of time. It is designed as a quick and easy read for owners and managers to assess the pulse of the company and is typically prepared weekly.
As a former CPA, COO, and small business owner, with over 25 years of experience in accounting and business management, the flash report was essential to me in managing all my business ventures. It changed the way I managed and resulted in more positive operational changes than almost anything else I implemented.
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Table of contents
Over time a flash report becomes a historical document of the evolution of the company. It really does change the way an owner manages their company.
The components of a flash report will vary from company to company and are fully customizable based on need. It is not meant to be restrictive or static. As particular metrics become less useful they should be removed or changed to keep the report relevant.
Below is a list of example components you might find in a typical flash report.
This section of a flash report may include key financial measurements related to:
This section of a flash report may include measurements on sales performance and marketing efforts related to:
This section of a flash report may include measurements on the company's operational efforts related to:
This section of a flash report includes anything related to the company's competitive environment; including trends, opportunities, risks and competitor information that is readily available and would help explain other changes.
There are 5 specific steps to implementing a flash report.
However, it is important to remember, a flash report is a reporting process and evolves over time as the business needs change. A flash reporting process is very fluid.
Implementing flash reporting should follow a process such as this:
The first step for an owner or management team is to determine what is considered the most important information to track and measure. Too much information and the report becomes complicated and less effective. Too little information and the report may overlook critical trends or changes.
Asking questions is a good way to identify what key measurements to track. Here are a few to consider:
Once you know what information will be included on the flash report, you will need to determine how and where to capture the information.
Much of the data will likely be found in your accounting software. Even with basic software like Quickbooks Online or Xero you will be surprised how much information can be extracted.
Likely there are other systems or apps in place that track different types of activity like Google analytics, Google console, Google adwords, cell phone accounts, payroll services and email distribution. And if all else fails, simple tracking or counting can accumulate very valuable information with minimal effort.
The flash report template is not meant to be complicated. It can take on any form you desire and works best with a simple spreadsheet or google sheet. Graphs, charts and other bells and whistles often just distract from the focus of the report. Keeping it simple stupid (KISS) is the best advice.
It will likely take 3-4 weeks for the flash report to take form and feel meaningful. Stick with it and you will not regret the decision.
And always remember, there is no right or wrong way and no permanent element that can’t be changed. So configure, revise and repeat. Do what works best for you.
As previously mentioned, a flash report is meant to provide timely information to help correct problems, manage change, and establish strategy.
That said, a weekly basis flash report is ideal but it only works if you are consistent. Missing a week or producing an incomplete report devalues the comparability of the numbers and lessens the value of the report.
Daily basis may be necessary for a few key metrics like cash flow, but likely is too frequent for most other information. If you find you need multiple flash reports then keep the extra reports as small as possible.
A monthly frequency reduces the timeliness to act. Many business owners like to start their week by reviewing the past week. A weekly flash report gives them the perfect tool to do just that.
The review and analytical step in the flash report process cannot be understated.
Understanding and interpreting the numbers is THE VALUE PROPOSITION of a flash report.
Don’t short change the process. Look for trends, correlations, missed information, weird numbers, unusual spikes and a host of other trigger points.
These trigger points create discussion, which leads to solutions, and is where the benefit is found.
Flash reports help owners and managers know their numbers, monitor financial performance and affect change in the business.
Flash reports provide good business practices which take the guesswork out of decisions and provide strong support for setting strategy and implementing change.
Here are other benefits that often get overlooked. Over the years I have seen all of these benefits from using a flash report.
Yes, you can hire an expert to implement a flash report. I thought you’d never ask.
I understand it may feel daunting to a non-financial person.
So, whether it is:
I am here to help you in any way I can.
I’ve spent 25 years building and refining flash reports for small businesses and would be happy to help..
It is an investment that pays dividends in as little as 4 weeks.
Contact me at craig@accountingsmarts.com and we can start the discussion today.
Craig has spent 25 plus years in the world of accounting and business. His experience includes working as a CPA/Auditor for international accounting firms. He has worked as a controller and as a COO for small to medium-sized companies.
