My clients are small to medium-sized businesses run by owner/operators. That is, the owner of the business is actively involved in the management of the business on a day-to-day basis. My work with these clients takes many forms but the most common and fundamental element is a monthly meeting with the owner. Often one or more key employees are also involved and usually the top accounting person in the company is involved in the meeting, at least for the financial portion of the meeting.
These monthly meetings are very important. We start with the financial performance of the business for the most recent month, year-to-date and compared to the budget. The insights gained from looking at timely and accurate financial statements are extremely important. Do we need to make changes? Are we progressing according to our plan? Is there a looming cash flow problem? What other opportunities are there? Most things in business eventually get quantified and the financial statements are the summary of the business’s performance.
Besides the financial review, the discipline of meeting monthly is important. It instills a sense of rigor that businesses need. And much can change in a month. It is important to check in and adjust if necessary. And while much of running a business is non-routine, I think that one does need a certain amount of routine.
Below I’ve got a generic checklist of monthly issues for this meeting. I don’t use the whole list with any client but I pick and choose what is relevant and appropriate. The checklist helps me make sure we don’t miss anything important. Feel free to use this checklist yourself.
The Monthly Checklist
A Fitness Checkup for Every Business
Financial Review
- P&L for past month and YTD or 12 months trailing.
- P&L for past month and YTD compared to budget.
- Balance Sheet at latest month-end and today.
- Job Cost report for YTD or all Jobs in progress.
- Analysis of gross margins and net margins.
- AR Aging at month-end and today.
- Discussion of any problem accounts and what action to take.
- AP Aging at month-end.
- Cost allocation issues.
- Owner draws.
Cash
- Amount in bank at month-end and currently.
- Line of credit balance at month-end and currently.
- Forecast of cash situation for the next few months.
Taxes
- Company income, payroll and excise taxes.
- Owner income tax returns.
- Owner estimated payments.
Financing
- Is the Line of Credit renewal coming up?
- Do we need to finance equipment?
- How is the relationship with our bank?
- How is our credit card situation?
Budgets
- Are we working on new budgets?
- Are we rolling budgets further forward?
- Do we need to modify our existing budget?
Backlog (under contract, not yet performed)
- What is the existing backlog of work?
- How long will the backlog take to fulfill?
Pipeline (prospects for future work)
- Review of the Pipeline for future work.
- Updates including new prospects, prospective work we were not successful on, etc.
- Efforts to increase our Pipeline.
Marketing/Sales
- What Marketing initiatives are we taking or should we be taking?
- Are sales on target?
- Special projects.
- Are there new markets we should be considering?
- Does our website need work?
Operations
- Any challenges, holdups?
- Any major changes or special projects?
Personnel Issues
- New positions we are looking to fill.
- Terminations, departures, layoffs.
- Reorganization?
- Problem employees, challenges, opportunities.
Facilities and CapX
- Are the current facilities sufficient for now and the near term?
- Do we need to consider expansion?
- Are there capital expenditures we need to make?
IT
- Infrastructure.
- Software needs.
- Hardware needs.
Business Plan
- Are we working on a Business Plan?
- Are we updating modifying an existing Plan?
Exit Plan
- Are we working on an Exit Strategy or Plan?
Other Advisors
- Coordination of efforts.
- Are there others needed? Sales, marketing, HR, legal, CEO coach bank or?????
Other Topics Not Covered Above
There you have it. Time to get to work!
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