The Fiscal Reports You Actually Need
Because a Check Run Is Not a Financial Report
Let’s say this kindly, but clearly: a check run is not a financial report. It’s a receipt.
A check run tells you what you paid. It doesn’t tell you whether you’re on track, whether you have enough cash next month, whether a fund is quietly sinking, or whether you’re borrowing from your future. It’s like looking at your Amazon order history and calling it a retirement plan.
Most of our clients are initially in one of two places:
- They get no regular reports at all (just bank balance conversations and invoice approvals), or
- They get one report: year‑to‑date versus budget.
YTD vs budget is a good start. It’s also dangerously incomplete. It can lull you into thinking things are fine when they’re not, especially if you’re not capturing timing, accruals, payables, receivables, and fund constraints.
So what should a “minimum viable” monthly reporting package include?
First, the budget‑to‑actual needs to be readable and honest. If your revenues are seasonal, say that. If your biggest expenses hit in certain months (insurance, debt payments, contractual, salt), say that. Most “budget surprises” aren’t actually surprises—they’re just not labeled. Most budgeting platforms let you build the budget by month. Most people we’ve worked with don’t do that, though, and miss a great opportunity to have excellent YTD reports – and plan cashflow.
Second, a balance sheet (or whatever your system calls it). This is where staff sometimes roll their eyes because they think boards won’t understand it. That’s true only if you hand them a raw balance sheet and walk away. A balance sheet is simply “what we have and what we owe right now.” If you’re flying blind, this is the instrument panel you’ve been ignoring. The budget-to-actuals (or income statement or profit and loss statement) are pretty meaningless without a balance sheet. But that’s one of the hardest reports to get right and maintain, so we don’t frequently see a good one.
Here’s why it matters: you can look “fine” on YTD vs budget and still have a balance sheet screaming for help. Rising payables. Shrinking cash. Ballooning due‑to/due‑from balances. Receivables piling up. Those are early warnings that don’t always show up clearly in an income statement.
Third, a statement of revenues and expenditures (income statement in normal‑human language). This is your “did we run a surplus or deficit this month/year‑to‑date?” view. In government accounting, the naming varies, but the purpose is the same: show the flow of money in and out.
Fourth, a cash summary and reconciliation status. You don’t need a Wall Street cash flow statement to manage cash. But you do need to know: how much cash is available in key operating funds, what big payments are coming, and whether bank accounts are reconciled through month‑end. If your cash number isn’t reconciled, you’re flying blind with a fancy dashboard.
Fifth, payables and receivables summaries. Even small governments benefit from a simple A/P view (what bills are outstanding and how old they are) and A/R view (what people owe you and how old it is). When A/P ages out, you’re quietly training vendors that your municipality pays late. When A/R ages out, you’re quietly accepting revenue loss and cash stress.
Sixth—this is the one people forget—interfund activity. In Pennsylvania, most of you operate multiple funds: General Fund, Liquid Fuels, Fire/EMS, Capital, and often water/sewer/stormwater enterprise funds. If money is moving between those funds and you’re not reporting it clearly, you’re setting up future conflict. Interfund transfers are not inherently bad. Unexplained interfund transfers are how you get a meeting room full of raised eyebrows.
“Okay,” you might say, “but our accounting system is… complicated.” We get it. Some of you are on QuickBooks (and we’ll talk about that reality in a later post). Some are on Edmunds, New World / Munis, AccuFund, Vadar, SafeChoice and others. The truth is: the system matters, but it matters less than the habits. Any system can produce decent decision‑useful information if you set up the chart of accounts correctly and close the month consistently.
Now here’s the practical coaching piece: don’t try to “report everything.” Report the same core set every month, and add commentary. Honestly, a 2 page handout summarizing the salient points is more helpful than pages of reports.
The best monthly packets we see aren’t the thickest. They’re the clearest. They lead with a short narrative (yes, a paragraph) answering: What changed? What’s on track? What isn’t? What’s coming next month that we should prepare for?
That’s managerial accounting in a nutshell: decision‑useful information beats perfect information. If your board or manager can’t tell what the numbers mean, you’re handing them data, not insight.