If you have recently implemented/migrated to a new ERP system, you are probably excited about exploring the full spectrum of [what] it has to offer to facilitate the management of your business and the best way to do that is to have a hold on the Key Reports and KPIs.
The Reports and KPIs arm business people with all relevant and timely information concerning the operational performance of your ventures. They give scores on the regular evaluation of programs so that informed decisions can be made and performance can be gauged. Most importantly, the reports give intelligence to users so they can, with instant insight, identify emerging problems without disrupting their day-to-day operations.
Below are the must-have reports and KPIs I relied on while running my businesses, and they will keep you informed and, consequently, in control.
Financial Reports
Financial reports are, for sure, the bedrock of the health of your business. Monitoring these accounts will allow a business to know whether it is profitable, liquid, or generally healthy in terms of finances.
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Profit & Loss Statement (Income Statement)
The P&L is perhaps, the most paramount single report a business can fall back on. It summarizes your revenue, cost of goods sold, and operating expenses to print out central information about net profit or loss within a predetermined time. With this documentation, you can check the overall performance of your business across a certain period.
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Balance Sheet
The balance sheet shows the financial position of a company in terms of assets, liabilities, and equity. It allows, in fact, the understanding of solvency with respect to running vitality and speaks about what the company has versus what it owes.
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Cash Flow Statement
A Cash Flow Statement tracks the movement of cash into and out of your business. It helps you understand your liquidity, ensuring you can meet your financial obligations and plan for periods when cash flow might dip. It’s crucial for planning payments, payroll, and capital investments.
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Budget vs. Actuals Report
This report compares your actual performance against budgeted goals, which is vital for adjusting strategies and addressing gaps. Monitoring this regularly allows you to quickly take corrective actions if sales or expenses deviate from the planned targets.
Inventory Reports
Inventory management requires constant focus to maintain a stable cash flow and avoid unnecessary expenditures. Since the inventory item is often the most valuable asset, effectively monitoring its performance goes a long way in achieving higher operational efficiency.
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Inventoried Products Report
It is the simplest report showing your current stock levels, the value of the stock, and product status across different locations, such as warehouses and stores. It also shows the items that currently have sales or purchase orders.
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Velocity Report
The report highlights products that move quickly (fast-moving) and those that do not (slow-moving). By analyzing the trends in this report, users can make quick and informed decisions regarding restocking or discontinuing some products. However, businesses should make sure the raw data is always reviewed, to avoid distortion in results due to seasonality and AI-Based projection.
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Inventory Turnover Report
This report measures how often inventory is replenished relative to the cost of goods sold (COGS). A higher turnover ratio generally indicates better efficiency, but the ideal rate can vary depending on your business model. The report also shows “days on hand,” indicating how long inventory typically lasts before being sold or used.
Accounts Payable and Receivable Reports
Keeping track of money you owe (accounts payable) and money owed to you (accounts receivable) is vital for maintaining cash flow and financial stability. These reports allow you to monitor outstanding payments and ensure you’re staying on top of both incoming and outgoing funds.
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Accounts Payable Report
This report gives you a detailed view of outstanding payments, ensuring you’re aware of what you owe and when it’s due. By monitoring accounts payable, you can avoid late fees and negotiate better payment terms with suppliers.
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Accounts Receivable Report
Tracking money owed to you is equally important. An accounts receivable report helps ensure timely collections from customers and offers insights into the aging of outstanding invoices, so you can follow up before payments become overdue.
KPIs and Dashboards
With the right ERP system, you can have real-time access to key performance indicators (KPIs) and visual dashboards that provide a quick, at-a-glance understanding of your business metrics. These dashboards streamline decision-making by consolidating the most critical data into digestible visualizations.
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Sales and Sales Goals
Track your current sales performance and compare it to your monthly and annual sales goals. Use historical data for benchmarking, allowing you to identify trends and adjust forecasts when needed.
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Cash Position
Link your bank accounts to your ERP system so that you can monitor cash balances in real-time. Knowing your cash position helps you avoid cash flow surprises and manage working capital more effectively.
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Top-Selling Products and Customers
These metrics give you a snapshot of which products are performing the best and which customers are generating the most revenue. This can inform inventory decisions, marketing strategies, and sales efforts.
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Margins and Turnover
Monitor profitability metrics such as gross margins and inventory turnover rates. These KPIs provide insight into pricing strategies, cost control, and inventory efficiency.
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Customizing Reports for Your Business Needs
While these reports and KPIs are a great starting point, tailoring them to your specific business is important. All good ERP solutions should have these reports built into their system but every industry and company has its unique metrics that matter most, so take the time to customize your ERP system to track what is most relevant to you. By setting up these key reports and KPIs, you will be well-equipped to monitor your business’s performance, address any concerns quickly, and keep your company on track for growth.
Versa Cloud ERP along with all the basic inventory, orders, and financial reports provides the customers the freedom to customize their reports as per their requirements. Take the First Step Towards Transformation with this ERP Reporting Essentials Guide!
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