Reading the reports — ten minutes, once a month

There are a lot of reports on the reports screen, and most owners open none of them — when you do not know which one to start with, they all look equally forbidding.

In practice, three of them once a month is enough. It takes ten minutes.

One — the month review

Last month on a single page: sales, profit, expenses, collections — and the month before it alongside.

The comparison is the whole point. A month's figure on its own says nothing; up or down on last month says something.

Two — what each product is doing

Products are sorted into three groups by how much money they bring in:

• The first group — a handful of lines that bring in most of the money. In most shops 20 per cent of products bring 80 per cent of the takings.
• The second — the middle.
• The third — a lot of products bringing in very little.

What to do with the list:

Never let anything in the first group run out. One of those off the shelf is a direct cut into the day's takings. Set their reorder levels a little higher than the rest.

Look hard at the third group. Lines that have sat on the shelf for months are money stuck on a shelf. Discount them out and put that money into the first group.

One caution: some slow lines are there on purpose — people come in for that one thing and buy something else while they are there. Do not cut from the list with your eyes shut.

Three — the ageing of what you are owed

Who owes what, and for how long. The due ledger guide covers it properly, but it belongs in the monthly read too — because a month that looks profitable on paper, with all of that profit still sitting in the khata, is not a good month.

The reports you do not need yet

The rest are genuinely useful, but at the moment they are needed and not before. Staff activity matters when something looks wrong; the VAT report matters at filing time. There is nothing to be gained by opening them in advance.

Make it a habit

Put ten minutes aside on one morning at the start of the month, before the shop opens, with tea. Everything a report could have told you in time to act on is still true if you read it twice a year — you have just missed the window.