What Is A Flash Report?

‍Financial statements are the standard reports for most businesses, but a flash report provides the greatest tool to monitor financial health.

What is a flash report?  It is a summary of key financial and operational metrics that details a company’s performance during a specific period of time.  It is designed as a quick and easy read for owners and managers to assess the pulse of the company and is typically prepared weekly.

As a former CPA, COO, and small business owner, with over 25 years of experience in accounting and business management, the flash report was essential to me in managing all my business ventures. It changed the way I managed and resulted in more positive operational changes than almost anything else I implemented.

‍The Basics Of A Flash Report

• A flash report is a management tool to help you improve your business by identifying trends, variances, and concerns.

• A flash report should be prepared on a daily, weekly, or monthly basis.

• A flash report should take no more than 30 minutes to prepare and be no longer than a single page report. It is meant to be a quick and easy read.

• A flash report is based on historical data, but the timeliness of reporting increases the usefulness of the information.

• A flash report should be simple and easy to understand, highlighting only the most important financial and operational metrics needed by decision-makers to quickly spot trends, areas of concern, and areas of opportunity.

• A flash report should not be static and is fully customizable to meet the specific needs of the company.  The tracked metrics can and often should be changed, deleted or updated as the company evolves.

• A flash report is typically prepared by the accounting department, but could be prepared by anyone from the owner to an assistant depending on resources and complexity.

• A flash report works best as an Excel spreadsheet or Google sheet, so there is no extra cost for software.  It can be implemented in the smallest of companies.

• A flash report is more effective than the dashboard included in most software due to its flexible customization and layout.

• A flash report should be compared with week over week data, averages or budget numbers to provide greater perspective about the numbers.

• A flash report provides many benefits which are detailed later.

Over time a flash report becomes a historical document of the evolution of the company.  It really does change the way an owner manages their company.

What Should Be Included In A Flash Report

The components of a flash report will vary from company to company and are fully customizable based on need.  It is not meant to be restrictive or static.  As particular metrics become less useful they should be removed or changed to keep the report relevant.

Below is a list of example components you might find in a typical flash report.

Financial Section

This section of a flash report may include key financial measurements related to:

1. revenue
2. cost of goods
3. expense
4. margins
5. cash flow
6. financial ratios
7. accounts receivable aging
8. accounts payable aging
9. debt
10. other relevant financial information

Sales and Marketing Section

This section of a flash report may include measurements on sales performance and marketing efforts related to:

1. Sales volume (units sold),
2. Average order value
3. Repeat sales %
4. New sales %
5. Sales by category
6. Sales by location
7. New customer acquisition cost
8. Number of organic or PPC  leads
9. Social media traffic
10. Number of new backlinks
11. Email open rate, leads
12. Customer satisfaction scores
13. Domain authority
14. Website core vitals compliance
15. Other relevant sales and marketing information

Operations Section

This section of a flash report may include measurements on the company's operational efforts related to:

1. Vendor load capacity
2. Production volume
3. Inventory levels
4. Employee turnover ratio
5. Billable hours
6. Number of transactions processed
7. Number of customer service complaints
8. Number of rejects or returns
9. Number of phone calls received
10. Other relevant operational information.

External Environment Section

This section of a flash report includes anything related to the company's competitive environment; including trends, opportunities, risks and competitor information that is readily available and would help explain other changes.

How Do You Implement A Flash Report

There are 5 specific steps to implementing a flash report.

However, it is important to remember, a flash report is a reporting process and evolves over time as the business needs change.  A flash reporting process is very fluid.

Implementing flash reporting should follow a process such as this:

Identify the Key Measurements to Track

The first step for an owner or management team is to determine what is considered the most important information to track and measure.  Too much information and the report becomes complicated and less effective.  Too little information and the report may overlook critical trends or changes.

Asking questions is a good way to identify what key measurements to track.  Here are a few to consider:

• What information do I personally ask about each week?
• What information do other people ask me about each week?
• What is critical to know about the business?
• What keeps me or my managers up at night?
• What information, if known, will have the greatest influence on my decisions?
• What metric of the business do I want to understand but don’t have data for?
• What specific areas of the business are we trying to correct or improve?
• What area of the business do I know least, but need to know more?

Determine How the Key Metrics will be Captured

Once you know what information will be included on the flash report, you will need to determine how and where to capture the information.

Much of the data will likely be found in your accounting software.  Even with basic software like Quickbooks Online or Xero you will be surprised how much information can be extracted.

Likely there are other systems or apps in place that track different types of activity like Google analytics, Google console, Google adwords, cell phone accounts, payroll services and email distribution.  And if all else fails, simple tracking or counting can accumulate very valuable information with minimal effort.

Create the Flash Report Template

The flash report template is not meant to be complicated.  It can take on any form you desire and works best with a simple spreadsheet or google sheet.  Graphs, charts and other bells and whistles often just distract from the focus of the report.  Keeping it simple stupid (KISS) is the best advice.

1. Start by creating a listing of the sections described above:  financial, sales and marketing, operations,and external environment.
2. Next add the key metrics identified as important to your company and list them under the appropriate section heading.
3. Next locate the actual numbers for the identified metrics based on the selected time period
4. Review and analyze the entire report.  Evaluate what works and what doesn’t work and what needs a trend, a goal or an average for it to mean anything.  Adjust the report to adapt to this finding.
5. Repeat steps 1 through 4 each week thereafter.

It will likely take 3-4 weeks for the flash report to take form and feel meaningful.  Stick with it and you will not regret the decision.

And always remember, there is no right or wrong way and no permanent element that can’t be changed.  So configure, revise and repeat.  Do what works best for you.

Establish a Reporting Frequency

As previously mentioned, a flash report is meant to provide timely information to help correct problems, manage change, and establish strategy.

That said, a weekly basis flash report is ideal but it only works if you are consistent.  Missing a week or producing an incomplete report devalues the comparability of the numbers and lessens the value of the report.

Daily basis may be necessary for a few key metrics like cash flow, but likely is too frequent for most other information.  If you find you need multiple flash reports then keep the extra reports as small as possible.

A monthly frequency reduces the timeliness to act.   Many business owners like to start their week by reviewing the past week.  A weekly flash report gives them the perfect tool to do just that.

Review and Analyze Performance

The review and analytical step in the flash report process cannot be understated.

Understanding and interpreting the numbers is THE VALUE PROPOSITION of a flash report.

Don’t short change the process.  Look for trends, correlations, missed information, weird numbers, unusual spikes and a host of other trigger points.

These trigger points create discussion, which leads to solutions, and is where the benefit is found.

What Are The Benefits Of A Flash Report

Flash reports help owners and managers know their numbers, monitor financial performance and affect change in the business.

Flash reports provide good business practices which take the guesswork out of decisions and provide strong support for setting strategy and implementing change.

Here are other benefits that often get overlooked.  Over the years I have seen all of these benefits from using a flash report.

1. Low cost, big return
2. Provides timely financial reporting
3. Identifies trends and potential issues early
4. Facilitates quick decisions
5. Effective management oversight
6. Simple goal tracking
7. Effective tool for training employees
8. Stimulates open discussion
9. Correlates data
10. Accountability
11. Monitors data accuracy
12. Encourages good book keeping

Can I Hire An Expert To Implement A Flash Report

Yes, you can hire an expert to implement a flash report.  I thought you’d never ask.

I understand it may feel daunting to a non-financial person.

So, whether it is:

• Designing the template
• Identifying the metrics
• Finding the data source
• Preparing the entire report, or
• A little bookkeeping

I am here to help you in any way I can.

I’ve spent 25 years building and refining flash reports for small businesses and would be happy to help..

It is an investment that pays dividends in as little as 4 weeks.

Contact me at craig@accountingsmarts.com and we can start the discussion today.