Monthly Financial Reporting Package: What Leadership Needs to See
Building reporting that drives decisions, not just documents history.
Key Takeaways
- •Monthly packages should arrive within 15-20 days of month-end
- •Include financials, variance analysis, KPIs, cash position, and commentary
- •Focus on insights that drive action, not just numbers
- •Tailor depth and detail to your audience
A monthly reporting package is more than financial statements—it's leadership's primary window into business performance. Done well, it enables better decisions. Done poorly, it's ignored or, worse, misleading.
This guide covers what to include in your monthly package and how to present it effectively. Many companies work with a fractional CFO to design and implement reporting that drives action.
Core Package Components
An effective monthly package includes several key components. Tailor the depth based on your organization's needs and audience.
1. Executive Summary (1 Page)
One-page overview for executives who won't read the full package:
- • Key headlines: Revenue, EBITDA, cash position vs. plan
- • Top 3-5 highlights and lowlights
- • Critical issues requiring leadership attention
- • Updated full-year outlook
2. Financial Statements with Variance Analysis
Standard financials enhanced with comparison columns:
- • P&L: Actual vs. budget vs. prior year (month and YTD)
- • Balance Sheet: Current vs. prior month vs. prior year-end
- • Cash Flow: Actual vs. forecast
- • Variance explanations: Written commentary on material variances
3. KPI Dashboard
Key metrics with trends and targets:
- • Revenue metrics: Growth rate, MRR/ARR, bookings, churn
- • Profitability: Gross margin, EBITDA margin, contribution by segment
- • Operational: Utilization, on-time delivery, quality metrics
- • Cash: DSO, DPO, cash conversion cycle
- • Customer: CAC, LTV, NPS, retention rate
4. Cash Position & Forecast
Detailed view of liquidity:
- • Current cash position and available credit
- • 13-week cash flow forecast
- • AR aging and collection status
- • Major upcoming cash requirements
- • Covenant compliance (if applicable)
5. Management Commentary
Narrative that brings numbers to life:
- • Explanation of significant variances and trends
- • Status of major initiatives and projects
- • Risks and opportunities on the horizon
- • Actions being taken to address issues
- • Updated guidance if materially different from plan
Effective Variance Analysis
Variance analysis is where reporting transforms from documentation to insight. Good variance analysis answers: What happened? Why? What are we doing about it?
Variance Analysis Best Practices
- Set materiality thresholds: Not every variance needs explanation. Define thresholds (e.g., $10K or 10% of line item)
- Categorize variances: Volume, price, mix, timing, permanent vs. temporary
- Explain root causes: "Revenue was down $50K" is description. "Revenue was down $50K due to delayed customer go-live" is analysis
- Quantify drivers: "Higher labor costs" is vague. "$30K higher labor from 3 new hires in advance of Q4 project" is actionable
- Connect to outlook: Is this variance one-time or will it persist? Update forecast accordingly
Example Variance Commentary
Revenue: $1.2M actual vs. $1.35M budget (-$150K, -11%)
Revenue shortfall driven by two factors: (1) ABC Corp implementation delayed to January ($100K impact, timing—will recover in Q1), and (2) lost XYZ contract to competitor ($50K impact, permanent—removed from forecast). Excluding the timing shift, underlying business is on plan. Full-year forecast adjusted to $15.8M from $16.0M to reflect XYZ loss.
KPIs That Drive Decisions
Your KPI dashboard should include metrics that actually influence decisions, not vanity metrics that look good but don't drive action.
SaaS/Subscription Business
- • MRR/ARR and growth rate
- • Net revenue retention
- • Gross churn and logo churn
- • CAC and CAC payback period
- • LTV and LTV:CAC ratio
Professional Services
- • Billable utilization
- • Average bill rate and realization
- • Revenue per professional
- • Project margin by client/type
- • Pipeline and backlog
Product/E-Commerce
- • Units sold and average order value
- • Gross margin by product/channel
- • Inventory turns and days on hand
- • Customer acquisition cost
- • Return rate
Manufacturing
- • Production volume and capacity utilization
- • Yield and scrap rates
- • Cost per unit and variances
- • On-time delivery
- • Inventory levels by category
The 10-15 Rule
A monthly KPI dashboard should have 10-15 metrics maximum. More than that dilutes focus. Choose metrics that (1) leadership can actually influence, (2) connect to strategic priorities, and (3) provide early warning of problems.
Presentation Tips
How you present information matters as much as what you present.
- Lead with headlines: Don't bury the key messages. Executive summary goes first
- Use consistent formatting: Same structure each month makes trends visible and comparisons easy
- Visualize trends: Charts for trends, tables for detail. 12-month trailing charts show patterns
- Highlight exceptions: Color coding (red/yellow/green) draws attention to items needing action
- Be concise: More pages doesn't mean more value. Edit ruthlessly
- Include sources: Reference where data comes from for those who want to dig deeper
Timing & Distribution
A report that arrives 30 days after month-end is historical documentation, not decision support. Aim for 15-20 days.
| Timing Target | Maturity Level | What It Requires |
|---|---|---|
| Day 25-30 | Basic | Manual processes, limited staff |
| Day 15-20 | Good | Streamlined close, defined processes |
| Day 10-15 | Excellent | Automation, strong team, clean data |
| Day 5-10 | World-class | Continuous close, real-time systems |
Related Resources
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