Last updated by
Craig Fry
on
March 31, 2023
A template is a very helpful tool when creating a report. However, a flash report has no defined template. It can be presented in any form.
Key Takeaways
A template is a very helpful tool when creating a report. However, a flash report has no defined template. It can be presented in any form.
The beauty of a flash report is customization. There is no set template. So what should be included in a flash report? A flash report may include key operational and financial metrics related to profitability, finance, sales, marketing or operations. Each company will be different.
As a former CPA and small business owner I have created numerous flash reports over the past 25 years. Each flash report was different and was geared around the needs of the specific business. Here are some best practices I’ve discovered over the years in creating flash reports that effectively monitor financial health.
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Table of contents
Flash reports may not have a formal template; however, there are good business practices that help companies create flash reports that are effective and results oriented.
Below are 14 guidelines to help you navigate the flash report creation process.
The big picture means creating your own unique template by first identifying major functional areas of your business that you want to measure.
Here are a few functional areas you might consider.
In deciding which of these you would like to use, one effective method is to ask questions, similar to the following, to guide your thought process.
The functional areas become the template to guide you in building out the more specific KPI’s, financial metrics and other data you want to track within the flash report.
There is an additional advantage to grouping metrics into functional areas. It improves your ability to see correlations and analyze the data.
With the big picture framework in place for flash reporting you are ready to drill down to what really matters - the key metrics.
Focusing on what matters most means to identify the financial metrics and other measurements that really show the results of the business. Too many metrics waste both the preparer and reviewers time, distract from what is really important and make the report less effective.
Flash reports should be short, simple and easy to read. If it takes longer than 5-10 minutes to digest, it likely will not be used. So, don’t waste time on numbers or metrics that won’t affect change, show the health of the company or are insignificant in the operations of the business.
If you need extra metrics, isolate the ones that might be for a specific person and consider implementing multiple flash reports for different management team members. A good rule of thumb is 3-5 metrics per functional area. This will provide the biggest impact.
A flash report should solve a problem not create one.
Remember, you can delete, change or add anything that doesn’t bring value.
Knowing your frequency relates to how often flash reports should be produced. Flash reporting does take time so consider the resources available.
Weekly flash reporting provides the greatest value, but you might choose monthly or daily reporting depending on your needs. It is not recommended to go longer than one month. Beyond one month's length of time, financial performance and financial ratios become dated and less valuable for decision makers.
By producing a flash report frequently it allows you to see changes in your business and act quickly rather than waiting a quarter or a year to discover a problem.
A weekly flash report is not real time data, but because it is only a week old it is almost as good as real time data.
Software and automation workflows are the ideal, but a lack of software and automation does not need to stop you from creating an effective flash report.
Rest assured, most small business owners and solopreneurs already have everything in place to implement a flash report. All it takes is Google Sheets and a simple accounting system like Quickbooks Online or Xero and you have access to all the information you need.
Creating a report does take time, but once the template is created the time can be significantly reduced. Another way to reduce preparation time is through automation. Again this is nice if you have the expertise, but don’t let it stop you from moving forward.
Knowing your audience is understanding who the flash report is designed for. Is it the owner, a sales or operations manager or an external party. Knowing who is a key component to creating a successful flash report.
A sales focused report to the operations manager or a marketing focused report to the finance manager likely has no impact on their responsibilities. Or what about a multi page report going to the CEO who has very limited time.
Understand who you are speaking to, so a flash reports value can be maximized. Decisions are at stake.
Crunching the numbers is determining how to acquire or calculate the various metrics you want to include. It is one thing to want the metric, it is another thing to know how to find or calculate the metric.
This isn’t hard, it just requires knowing where. Most of the metrics likely will be a number from Quickbooks or Xero. You might have numbers from a spreadsheet, a payroll report, Google Analytics or another dashboard report. The beauty of a flash report is it brings all these key metrics and financial ratios into one report.
Sometimes a metric is a combination of multiple numbers, like average sales dollar per customer. If this is the case, just determine the formula and capture the specific data to plug into the formula.
If there is no readily obvious place to capture a piece of information then you might need to brainstorm possible solutions or choose a different metric that will provide the same insight.
Keeping the books clean is the number one requirement for a flash report. If the books are disorganized the flash report will be disorganized. Good source data is critical.
Consider your accounting processes. Are transactions properly recorded, are transactions input in a timely manner, are all adjustments entered.
What about expenses? Are personal and business expenses intermixed? Are proper accounting rules followed? All of these details and more determine if the flash report will be accurate. It starts with the books.
By starting with the flash report you learn what is lacking and what needs to be corrected. A weekly flash report will help identify if books are getting out of order because the numbers will look off. A flash report helps you fix your processes and systems.
Following the trends means to compare numbers week over week. Trend analysis provides the best insight in a flash report. By comparing metrics week over week real time trends become obvious, both positive and negative. A flash reports metrics gives you support to praise others, offer training or some other corrective action before things get out of hand.
Including a trend component in the flash report is easy if using a google sheet. Just insert a new column for each week while retaining the previous columns of data.
Additionally, adding annual averages helps to compare averages to prior year averages to see how things are changing year over year. It gives you a benchmark.
Similar to trend analysis, adding a budget number for the same period allows you to compare actual to goal.
Saying it in numbers, not pictures, keeps the flash report simple.
Pictures and graphs distract, use a lot of space and cloud the picture. Graphs and charts don’t compare nicely to previous weeks numbers.
Sticking to numbers on a flash report produces the best results.
Analyzing the numbers cannot be understated. The value of a flash report comes in what you discover in the numbers, in the trends and in the variances. You can’t identify these things without a good review.
When business is consistent and steady, a flash report may seem mundane and routine. But, resist the urge to ignore the report.
Change can happen quickly and a consistent review of the flash report is the best way to spot those changes. A 5 minute glance is better than discarding the report.
Being flexible means the report can change.
If a metric on the flash report is no longer serving a purpose, delete it. If a new metric becomes important, add it. If a calculation needs recalibrating, change it.
This is what makes a flash report valuable. It can change and adapt at any time as things change in the business.
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Send us a message at craig@accountingsmarts.com
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