A distributor should check nine reports: four every day (sales, cash and bank, customer outstanding, low stock) and five every month (supplier outstanding, sales by product, inventory value, expenses, and profit and loss). Together they answer the three questions that run the business: what did I sell, who owes whom, and what did I earn.
Which reports should you check every day?
1. Daily sales report
The sales report lists the day's invoices with customer, total, amount received and balance. Check it at closing: every bill should have a customer and either a payment or a balance.
2. Cash and bank report
The cash report shows the opening balance, money in, money out and the closing balance of each account. The closing cash figure should equal the money in the drawer. See cash, bank, expenses and drawings.
3. Customer outstanding
Customer outstanding lists every customer with a balance, the credit limit and the date of the last payment, largest balance first. It is the day's calling list. See managing udhaar.
4. Low stock
The low-stock list shows products at or below their minimum level. It is tomorrow's purchase order.
Which reports should you check every month?
5. Supplier outstanding
Supplier outstanding shows what you owe each supplier. Compare it with the suppliers' own statements before you pay.
6. Sales by product
Sales by product shows quantity sold, sales value, cost and gross profit for each item, with the margin as a percentage. It reveals which products earn and which only keep you busy.
7. Inventory report
The inventory report shows opening quantity, quantity in, quantity out and closing quantity for each product, with the closing stock value. Products with a high value and little movement are money asleep on the shelf. See stock management.
8. Expense report
The expense report totals each expense head for the month. Compare it with the previous month; a head that grows faster than sales needs a reason.
9. Profit and loss
Profit and loss puts it together:
| Sales | 2,400,000 |
|---|---|
| Less sales returns | (60,000) |
| Net sales | 2,340,000 |
| Less cost of goods sold | (2,040,000) |
| Gross profit | 300,000 |
| Less expenses | (155,000) |
| Net profit | 145,000 |
The cost of goods sold line is what makes it true. See why profit is not sales minus purchases.
What makes a report trustworthy?
A report is trustworthy when it is built from the same entries as everything else. If the sales report, the customer ledger and the stock ledger all read the same invoices, they cannot contradict each other. A report typed up separately is only as good as the typing.
What should every report let you do?
- Choose a date range.
- Search by customer, product or document number.
- Open the document behind any line.
- Print it, and export it to Excel.
How much time should this take?
The four daily reports take about ten minutes at closing. The monthly five take about an hour on the first working day of the month. That hour replaces the days a register-based business spends totalling books.
In M-Tech Logistics: all nine are built in, along with purchase, payment, stock movement and bank reports and printable customer and supplier statements. Each has a date range, search, print and Excel (CSV) export, and the dashboard shows the day's figures when you sign in. Reports and profit and loss are part of the third package and above. See the reports or compare packages.