Setting up a monthly board pack for a small business: what goes in, and who should put it together

Most owners of small private companies know they should look at their numbers every month. Plenty of them do, in a fashion: a glance at the bank balance, a scroll through the Xero dashboard, a P&L opened and closed again. What’s usually missing is a fixed monthly page that says where the business stands against what you’re trying to achieve, and what to do about it.

That page is a board pack. The name sounds bigger than it is. You don’t need a board, a finance team or expensive software. You do need four things settled: where the numbers come from, which numbers matter, when the pack lands, and who stands behind it.

Year-end accounts are a different document

Your accountant’s year-end accounts are built for the tax office and the bank. They tell you what happened over the last twelve months, they arrive months after the year closed, and they follow a format set by compliance rules.

A monthly board pack looks forward. It uses last month’s numbers to answer next month’s questions. Can we afford the hire? Is cash getting tighter or looser? Are we on track for the goal we set in July? It draws on the same ledger as the accounts but does a different job. If the year-end accounts are the only regular look you get at the business, you’re making this year’s decisions on numbers that can be more than a year old.

Step one: get the numbers right before you read them

Everything in the pack comes from your accounting system, so the pack is only as good as the books under it. Before you build anything, run three checks:

1. Is the bank reconciled to month end? Every account, including credit cards and loans. If it isn’t, the cash figure in your pack is a guess.
2. Do receivables and payables match reality? Run the aged debtors and creditors reports and look for invoices that were paid but never matched, or bills sitting there from last year.
3. Are the big balance sheet lines explainable? Anything you can’t explain in a sentence, such as a suspense account or an old loan that never seems to move, needs your bookkeeper’s attention first.

You don’t have to fix everything before the first pack. You do have to know what doesn’t tie, and say so in the pack, so nobody makes a decision on a number that’s wrong. From then on, every figure in the pack should trace back to the ledger, and any that don’t should be flagged.

Step two: choose six to eight numbers from your goals

The common mistake is to report everything the software can produce. A pack with thirty charts tends to get read once and then left alone. Start instead with what you’re trying to achieve this year: a revenue target, a margin you want to get back to, a cash buffer, paying yourself properly, getting ready to sell in a few years. Then pick the numbers that tell you whether you’re getting there.

Most small businesses end up with some version of this list:

• Cash and runway. Cash in the bank and how many months of costs it covers. Running out of cash is what actually closes small businesses, so put it first.
• Revenue against budget. Monthly, and year to date. A budget can be a simple monthly target, as long as you set it at the start of the year.
• Gross margin. Revenue less the direct costs of delivering it, as a percentage. A falling margin while revenue rises is one of the earliest warning signs you’ll get.
• Debtor days. How long customers take to pay you. When this drifts out, cash tightens even though sales look fine.
• Creditor days. How long you take to pay suppliers. Useful as a pressure gauge, especially if it’s creeping up because cash is short.
• A forward-looking number. Pipeline, booked work, signed contracts or forward orders, whichever tells you about revenue before it shows up in the P&L.

Add one or two that measure your particular goal directly, and stop there. If a number wouldn’t change a decision, it doesn’t belong in the pack.

For each number, the pack needs three things: this month’s figure, the target or last month’s figure to compare it with, and one plain sentence on what moved and why. The sentence is the part people skip, and it’s the part that matters most, because a figure on its own doesn’t tell you what to do.

Step three: fix the date and protect it

Pick a day of the month the pack lands, and hold it. Somewhere around the fifth to tenth business day suits most small businesses. That gives the bookkeeper time to reconcile the bank and enter the last of the bills. Any later and the month is half gone before you’ve read about the last one.

Then put the review in the calendar as a standing meeting, even if the meeting is you, a coffee and the pack. If you have a business partner, a spouse in the business or an outside adviser, they come too. Thirty to sixty minutes is plenty. Finish with a short list of decisions, each one with an owner and a date, so next month’s pack can check whether they happened.

Step four: decide who prepares it, and who signs it

There are usually three people in the frame, and each has a different job:

• The bookkeeper records the month accurately. That’s the foundation, but reading the numbers forward isn’t what you’re paying them for.
• The accountant handles compliance and tax, mostly at quarter and year end. Asking them for a monthly forward view is possible, but it’s usually billed by the hour and often isn’t their focus.
• Whoever prepares the pack turns a correct ledger into a view of the month ahead. In a small business that’s often the owner with a template. As the business grows it becomes a finance manager or an outside CFO.

Whoever it is, someone should sign the pack. Signing means the person has checked that every figure ties back to the books (or the pack says which ones don’t), and that the comments are their honest view, which they’re prepared to stand behind. When nobody signs, people stop trusting the numbers fairly quickly.

What the first three months look like

Month one is the baseline. The first pack mostly tells you where you stand today: cash, runway, margin, what’s owed to you and what you owe. It will probably turn up a few numbers that don’t tie. That’s normal. Send them to your bookkeeper and keep going.

Month two is the first real comparison. You can now compare against last month and check whether the decisions from the first review happened. The forecast gets better too, because there’s a month of real movement to work from.

Month three is the first reset. Three months of trend is enough to see whether the goals you set were realistic, whether the numbers you chose are the right ones, and what the next quarter’s priorities should be. Expect to drop a number or two and swap in something better.

From there each pack gets a bit more useful, because it has more history to compare against.

If you’re setting one up yourself

You can do all of this with Xero reports and a one-page spreadsheet. Write down your goals for the year, pick your six to eight numbers and set a date. Check the bank reconciliation, then each month fill in the figure, the comparison and one sentence on why. Expect the first one to take a few hours and later ones much less.

If you’d rather hand it over, this is the monthly pack we produce: every figure reconciled to your ledger, and every page reviewed and signed by a named adviser. Our prices are published. The companion pieces on the 13-week cash flow forecast and working capital go deeper on two of the numbers above.

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Want to see what a finished monthly board pack looks like? View a sample report. Or if you’d like to talk through what yours should include, book a 30-minute discovery call — no obligation.