Business Performance Reporting


In our video above, Ben Harrison talks to Business Performance Reviewing and Reporting and how this can benefit your business. A full transcript is below.

Assessing Business Performance

Why is it important to review business performance?

  • Generally business owners are heavily focussed on the day-to-day operations of their business, and so they should be, but it’s important to find the time to step-back and review the financial results of that work as well.
  • When you do that as a business owner, you get a better understanding of the financial impact of your daily decision-making.

What might you look for when reviewing business performance?

  • You’re trying to look at the correlation between the decisions you make as a business owner and the financial results of those decisions, like increased turnover resulting from the decision to increase marketing spend, or improved profit margins achieved after a changing from one supplier to another.
  • Reviewing the business at this higher level gives you some confirmation around your decision-making, whether you’re making the right calls or some changes in strategy are needed

Key Stakeholders

Who needs to know about the business performance?

  • The key stakeholders who need this high-level review are obviously the business owners, but they may also involve the management group and potentially key employees will be involved also.
  • You might also have external investors with an interest, or banks or other lenders who require periodic updates on how the business is tracking.

Why do these key stakeholders need to know?

  • From the owner’s perspective, they and their management group are the ones ultimately responsible for the performance of the business so they need this high-level information to make reactive and proactive decisions.
  • From the banks’ perspective, businesses will often have term loans or facilities in place that come with certain reporting requirements. The bank may want to see Interim Financial Statements, or updated Actual to Budget Cash Flow reports throughout the year to see that the business is performing as expected and in-line with any covenants attached to the business debt.


What are the benefits of short-term business performance review?

  • I’d consider short-term performance review as anything under a year, so it could mean assessing the business at half-year, quarterly, monthly, or even weekly intervals for certain key indicators. It could be as simple as reviewing gross turnover on a monthly basis and comparing to corresponding periods in prior years, or it could be monitoring debtors more regularly and improving the collections process if there’s a trend of slow payments.

What are the benefits of long-term business performance review?

  • You also need to review the business performance from year-to-year in order to see longer-term trends. There may be certain product lines that are performing better or worse over time, or macro events, like we’ve had with COVID, that impact performance in a particular year, so you need to consider the average earnings of the business over multiple years.
  • Another long-term consideration is if you’re positioning the business for sale in the future, any potential purchaser will want to see figures from a number of prior years. Reviewing that operating profit each year and considering multi-year averages gives a clearer picture of the business’ earnings, and ultimately how you’d value it at sale.

Tools & Reports

What tools and reports are available for effective business performance review?

  • With the rise in online accounting software over the last decade, the ability to review business performance at more regular intervals has improved significantly. Providers like Xero, MYOB, and Quickbooks give business owners, and us as advisors, current data throughout the year that feeds into a suite of reports that allows us to assess the business at any point in time.
  • Beyond these basic management reports, Cash Flow Budgets are a great tool for many businesses as they provide a target based on forecasts set at the beginning of the period. This could be built-out for several years, or updated as an Actual-to- Budget comparison report that tracks monthly performance against your original expectations, to see whether you’re meeting targets or falling short in areas.
  • One way we prepare these budgets is via our Online Dashboard where client’s online software can feed-in directly to an automatic 3-way Cash Flow Budget. From there it generates key financial ratios and detailed percentage changes in key accounts. It’s just another tool we use to help our clients review their business performance and highlight the information that’s most important to them.

For assistance with Business Performance Reviewing and Reporting please contact your Hall Chadwick advisor. 

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