Learning objective: Explain the purpose of each of the five key reports and how the cash and accrual bases change what a report shows.

Financial reports are how a director knows whether the program can keep its promises to families and staff. They show whether tuition covers costs, whether families and the State are paying on time, and whether there is enough cash to make payroll next month.

They also matter to people outside the program. Lenders, grantors, landlords, licensing specialists, and auditors may all ask for them. A director who can explain the reports is in a much stronger position in every one of those conversations.