The Monthly Finance Review

1Monthly results and decisions

A managed services provider (MSP) supplies technology services and products. The business needs reliable accounting records to understand what it earned, what it owes and what cash it holds. A monthly finance review is a structured conversation about those records, upcoming payments and business decisions. Both the admin manager and CEO use the same packet.

A profit and loss statement reports revenue and expenses for a period. Revenue is the amount earned from services or products under the reporting policy. Expenses are the costs recorded for that period. A balance sheet reports resources and obligations at a date. Assets are the business resources recorded in the books. Liabilities are recorded obligations. Equity is the accounting remainder after subtracting liabilities from assets.

A finance scorecard is a small set of measures reviewed regularly, such as gross margin and overdue invoices. A cash forecast estimates when money will enter and leave the bank. A finance packet collects these reports and the explanations needed for the monthly review. Include the profit and loss statement, balance sheet, collection and payment details, scorecard and current cash forecast when available.

The admin manager owns the preparation and explanation of bookkeeping and reporting. The CEO leads forecasts, financing and major decisions. An accountant supplies technical accounting or tax advice when a question requires it. The shared packet lets the admin manager develop financial judgment without requiring that person to independently approve a hiring, borrowing or acquisition decision.

QuickBooks Online supplies accounting records. Syncro supplies supporting service, contract and billing information. Excel supports analysis and forecasts. Accounting basis describes when the report records revenue and costs. A cash-basis report generally records receipts and payments when money changes hands. An accrual report records earned revenue and incurred costs in their applicable periods. Each report in the packet needs a date, accounting basis and preparation status. Keep confidential source records in the approved finance location. A shared training page can describe the procedure without publishing client names, payroll detail or bank information.

2Close status and reporting limitations

The monthly close is the process of checking and completing the records for a reporting period. Reconciliation compares records and resolves differences, such as comparing a bank statement with the accounting ledger. A reviewed close supports a stronger conclusion than an export taken before the checks are complete.

Use an explicit preparation status: draft, ready for review or approved under the company's process. Explain any open accounting question. A completed calendar month tells the reader the dates covered by a report. It does not establish that the books have been reconciled, adjusted and approved. Keep those two descriptions separate.

The supplied January through September 2026 figures cover completed calendar months, but the close approvals have not been supplied. October covers only October 1-6. The CEO says billing occurs on the first day and payroll synchronizes after the fifth and fifteenth. Those synchronization timings do not establish when payroll leaves the bank. A review packet using these exports should identify both the partial October period and the outstanding close confirmations.

Prepare an exception list for matters that could affect a decision. An exception is a specific unresolved record, assumption or policy question. Describe the amount or affected report, the missing evidence, the person obtaining that evidence and the date chosen for follow-up. A note saying the books need work gives the CEO little basis for deciding whether a particular purchase or forecast can proceed.

The company financial reference records the supplied aggregate figures, reporting periods and missing supporting records. Use that reference when checking this lesson's company calculations.

3The shared finance packet

Use the accounting statements to explain the period, then use the supporting schedules to show details and future obligations. A schedule is a supporting list or calculation. A receivables aging schedule lists unpaid client balances by due status or age. A commitments schedule lists amounts the business has agreed to pay and their expected dates.

Add a one-page explanation containing the largest relevant changes, important cash commitments, unresolved matters and decisions requested. Link each explanation to the supporting report. The purpose is to let another reader trace a conclusion to evidence. Keep the packet small enough to use during a regular working conversation.

Save the packet with the reporting period and version. If an accountant adjustment changes a figure, preserve the approved replacement and explain the change. A historical decision should remain traceable to the version available when the CEO made it. Avoid silently replacing a report while leaving its old explanation in the packet.

4Changes in revenue costs and profit

A variance is the difference between an actual amount and a comparison amount. The comparison might be an approved plan or a prior completed period. State the comparison before describing the result as favorable or unfavorable. More revenue can be useful, but revenue requiring even more additional cost can reduce profit.

The supplied August export reports revenue of $129,972.34, direct costs of $79,744.65 and overhead of $32,856.46. September reports revenue of $150,866.87, direct costs of $106,836.42 and overhead of $34,862.24. The increase in revenue is $20,894.53. Direct costs increase by $27,091.77, and overhead increases by $2,005.78.

Operating income therefore falls by $8,203.02, from $17,371.23 to $9,168.21. The calculation is revenue change minus direct-cost change minus overhead change: $20,894.53 - $27,091.77 - $2,005.78 = negative $8,203.02. This explains the arithmetic change. The figures alone do not explain why the costs changed.

The admin manager should request supporting detail for the cost and revenue changes. Possible investigation categories include product mix, project delivery, payroll entries, vendor charges and timing corrections. Treat those categories as questions until the records establish a cause. For example, the supplied September payroll-cost category is higher than August, but the aggregate does not establish a new hire, employee raise or payroll error.

The CEO needs a verified cause before choosing an action. A delayed vendor posting calls for a close correction. More hardware sold at a lower margin may call for a revenue-mix explanation. Additional service labor may call for a capacity or client review. The same total profit change can require different decisions.

5Cash obligations and financial decisions

The cash review asks whether the business can meet its dated payments. Accounts receivable is money recorded as owed by customers. Accounts payable is money recorded as owed to suppliers. Those balances support the cash review, but their payment dates and collectibility require detail. A bank balance without the commitments can overstate the cash available for a new decision.

The supplied September bank total is $364,295.70. The October 6 bank total is $312,490.80, a decrease of $51,804.90. That comparison identifies a change in reported balances. It does not identify the cause. Obtain bank transactions, reconciliations, card payments, receipts and other dated payments before explaining the movement.

The supplied accounts receivable increases from $10,860 at September month end to $128,891.43 on October 6. Billing on the first day helps explain why early-month receivables require a billing-cycle review. The supplied aggregates do not establish which invoices are overdue, disputed or scheduled for collection. Include a reconciled aging report and expected receipts before recommending a collection or cash decision.

A decision request states the action proposed, the evidence, the cash requirement and the conditions that must be met. If a project requires purchasing equipment, the packet should show the accepted scope, supplier terms and client deposit. If a hire is proposed, the CEO needs future cost, capacity and cash timing. The admin manager prepares the relevant inputs. The CEO selects and approves the business action.

6Review actions and accounting corrections

An action register records agreed tasks, responsible people and follow-up dates. Write an action so another person can tell whether the task is complete. Requesting a reconciled aging report is specific. Improving cash is an intended outcome that still needs a task, a source of evidence and a decision.

Distinguish a correction from a business change. An accounting correction fixes a record under the applicable policy. A business change alters a future price, supplier, staffing level or commitment. The admin manager can prepare a proposed correction with evidence. The appropriate reviewer confirms adjustments according to the company's authority and accountant guidance.

The CEO can approve the next business investigation even when the final decision remains open. For example, request a staffing cost estimate and capacity analysis before approving a hire. The action register should identify what the estimate must contain. That makes the next review a continuation of the decision rather than a repeat of the same unclear concern.

In a small company, the person who records a transaction may also prepare a payment. Add an independent review where the risk and available staff justify it. The CEO might approve the payment batch and review the bank reconciliation prepared by the admin manager. The review should examine source evidence and unusual changes, rather than merely confirm that a document exists.

7Monthly review practice

Use the supplied August and September aggregate figures as a reporting exercise. Close approval remains unconfirmed. Prepare a short explanation of the changes without inventing their causes.

1. Calculate the revenue, direct-cost and overhead changes from August to September.
2. Reconcile those changes to the change in operating income.
3. Write three evidence requests that could establish the causes. Refer to specific records rather than assuming a staffing or pricing event.
4. Draft a one-page explanation with results, limitations, a cash question and a decision request.
5. Prepare an action register with a preparer, reviewer and business-selected follow-up date for each evidence request.

8Your company monthly review

The admin manager assembles the latest finance packet and checks the accounting report totals against supporting schedules. Prepare the one-page explanation before the review so questions can refer to actual evidence. Keep unresolved matters in the exception list, including any missing reconciliation or accountant decision.

The CEO reads the explanation and chooses the decisions that need attention. Work through the reported result, its verified causes, the cash outlook and the action register. When a cause remains uncertain, agree on the evidence to obtain and the person responsible. Select dates that match the business's actual close and decision cycle.

The deliverable is a reviewed monthly finance packet with a recorded decision list and a follow-up register. The admin manager should be able to explain every reported calculation. The CEO should be able to explain the reasons for each approved action. Store sensitive source records and approval evidence in the restricted finance workspace.

9Going deeper

10The completed work

A reviewed monthly finance packet with a decision list and follow-up register.

Keep approved company work in your finance workspace. The course records study progress in this browser; it does not store your reports or forecast files.

11Quiz

1. A month has ended, but the bank reconciliation and payroll review remain open. How should the packet describe the reports?

   A.Approved because the calendar month has endedB.Draft with specific open checksC.Final if total assets equal liabilities plus equityD.Complete because the bank balance is positive
   Answer

   State the reporting period and the close status separately.

   Check answer
2. Revenue rises by $5,000, direct costs rise by $7,000 and overhead is unchanged. What happens to operating profit?

   A.It increases by $5,000B.It increases by $2,000 after subtracting costsC.It decreases by $7,000 while revenue is unchangedD.It decreases by $2,000
   Answer

   Explain the arithmetic difference, then investigate the cause before choosing a business action.

   Check answer
3. The payroll-cost account increased. Which statement belongs in the initial finance explanation?

   A.Payroll cost rose; the payroll register is needed to explain whyB.A new employee caused the full increaseC.The company must reduce its delivery team immediatelyD.Employee pay rates increased by the reported account difference
   Answer

   Keep a measured result separate from a proposed explanation until the source records support the cause.

   Check answer
4. The bank balance falls between September end and October 6. What should establish the explanation?

   A.The difference in net income aloneB.The first-day billing totalC.Reconciled transactions and dated cash movementsD.The current ratio rounded to a whole number
   Answer

   Use bank and accounting records to explain receipts, payments and other cash movements.

   Check answer
5. The CEO wants to consider a hire but the cost and capacity estimates are missing. Which review action is useful?

   A.Approve the hire because the company reports positive profitB.Assign a checked staffing and cash estimateC.Treat the concern as resolved until the next annual budgetD.Replace the forecast with last month's revenue amount
   Answer

   The action register should name the preparer, required evidence and follow-up date for the estimate.

   Check answer
6. An accountant adjustment changes an already reviewed month's profit. What should the reporting record retain?

   A.Only the old explanation because the review is completeB.Only a replacement total without a version or dateC.A revised target that hides the accounting adjustmentD.The replacement report and an explanation of the change
   Answer

   Preserve the approved reporting history and make the correction visible.

   Check answer

12Glossary

Monthly finance review

A regular review of financial records, upcoming payments and business decisions.

Finance packet

A collection of reports and explanations prepared for a finance review.

Monthly close

The process of checking and completing accounting records for a reporting period.

Reconciliation

A comparison of records that identifies and resolves differences.

Schedule

A supporting list or calculation behind a report.

Variance

The difference between an expected or comparison amount and an actual amount.

Exception list

A record of specific unresolved reporting matters and the evidence needed to resolve them.

Decision request

A proposed action supported by evidence, cash requirements and approval conditions.

Action register

A record of agreed tasks, responsible people and follow-up dates.

Materiality

Whether an amount or issue could influence a report user's decision.

13Sources

Company examples use the accrual reports supplied on October 6, 2026. Report periods, selected totals and limits are recorded in the company reference. Examples labeled practice use hypothetical inputs.

• SBA: Managing finances, assets and a sale: Business finance records and planning for management decisions.