Importance of income reports
On the income side, take a close look at the income report.
Almost everything you need to know in terms of income can be found in this report.
It will give you all the information you need from an income perspective.
Here you can see how new sales actually translate into revenue, what your revenue retention rate is, and how much your existing customers are growing.
This can be very helpful in determining if these factors are heavily dependent on a few key customers, or if they are spread out over many customers.
An important statistic that you will want to know on an ongoing monthly basis is the total contractual revenue at that point in time.
You can include the monthly revenue and contract end date for each client.
You can calculate the remaining revenue you will get from that client.
At any point in time, you need to show the remaining revenue on the contract.
It is also helpful to record the percentage of revenue under contract and the ratio of revenue under contract to current annual revenue.
This is another way to show how much time the average customer has left on their contract.
This ratio is a very good indicator of a company’s ability to predict revenue.
Obviously, the closer this ratio is to 1, the less stable the revenue will be.