Fractional ControllerMonthly financial statements a fractional controller prepares

What the monthly pack holds

Each month, once the books are closed, you get a short set of statements prepared from them. There are five parts. The profit and loss shows what the month earned and spent. The balance sheet shows what you own and what you owe on the last day. A cash summary shows where the money moved. Two lists, one of what customers still owe and one of what you still owe suppliers, show what's waiting to be collected and paid. And an open-items list shows what's not yet settled.

What each one answers

The profit and loss answers one question. What did the period do? It lines up the money earned against the costs of earning it, and lets you compare this month with the last using the same categories.

The balance sheet answers a different one. What does the company have, and what does it owe? The SBA calls it a snapshot of the business financials, and that's a good way to see it.

The cash summary answers where the money went. It's built from the bank, not from a hope.

The two aging lists tell you who owes you, who you owe, and how old each balance is. They're the part of the pack that most often leads to a phone call.

The open-items list says what the close couldn't settle this month and what's needed to settle it.

See my monthly pack

Why the balance sheet matters as much as the profit and loss

Most owners read the profit and loss first and stop. That's natural, but the balance sheet is where many mistakes show up first. If a loan balance is wrong, a deposit is stuck in a clearing account or a payroll tax liability never clears, the profit and loss will be off soon after. Reading both gives you a month that's whole.

You can see how the matching behind the balance sheet works in the reconciliations a controller checks.

A made-up example of a number that moved

Say a company's draft profit for the month was $14,000. After the close, it was $11,500. These numbers are made up and rounded. The difference came from an insurance bill that covers twelve months, which had been charged entirely to one month, and from wages earned in the last week that hadn't been counted. Both entries were correct in a way, and neither was in the right month.

The draft looked better than the month really was. The closed number is the one you could take to a lender or use to set an estimate.

Prepared from your books, with a plain note

These statements are prepared from your books. They carry a short note saying that no report of any kind was issued on them. That note keeps everyone clear about what the pack is. It's there for you to see the month and run the business, and it isn't a stamp from an outside firm.

Some lenders, investors and contracts ask for statements that come with a signed outside report. That's a different job, done by a licensed firm. This page explains where the line sits and what we hand over when you need it.

Reading it with a lender in mind

Lenders tend to look at the same few things. They look at whether the balance sheet and the profit and loss tell a consistent story, whether the bank balance on the sheet is the bank's balance, and whether anything odd sits in the receivables. A pack that was checked first answers those questions before they're asked. It also gives you a month you can explain out loud, in your own words, without hunting for the reason a number moved.

How soon you get it

You get the pack once the month is closed, not weeks later. The date depends on when statements and provider reports arrive, and on how fast entries come in. When the month closes explains what decides it.

Checked and closed. When the pack reaches you, the profit has been through its adjustments, the balance sheet agrees with the bank and the lenders, and the open items are written down rather than buried.

Ask how to read it

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