Do not Fly Blind. Understand the Financial Health of Your Business

Don’t Fly Blind…Understand the Financial Health of Your Business

Entrepreneurs and small business owners are notoriously creative, courageous, and fearless. However, many also suffer from a lack of focus when it comes to running their business. Typically, they would rather be inventing, expanding and moving forward, than keeping track of their business’s financial health. A wing and a prayer, simply isn’t enough; careful planning, continuous analysis, and adjustment is necessary. Thankfully, these individuals can rely on their accountant for help. Be proactive in your business’s financial health by being informed on the following items:


Do you know, today, what your actual expenses are? You can calculate the following items or have your accountant prepare a report. This report is particularly helpful to help navigate through seasonal sales fluctuations and economic downturns. It also gives you the opportunity to look for ways to cut expenses.

  • Rent/Real Estate (including insurance, and taxes)
  • Utilities
  • Cleaning Expenses
  • Employees (wages and overtime, bonuses, incentives, recruitment, health insurance premiums, Workman’s Comp, paid leave, Social Security, Medicare, Federal & State Unemployment Insurance Tax, local payroll taxes, payroll services, payroll expenses and Federal employment taxes)
  • Office Costs (office supplies, equipment, equipment maintenance)
  • Marketing Costs (advertising, association fees, networking costs, meals/entertainment)
  • Accounting Costs (In-house accounting professionals or outsourced accountant)
  • Taxes
  • Other (Anything missed above)

Cash Balance

At the start of the week and at the end of the week, you should know your cash balance. Quarterly it is helpful to know a total asset balance, as equipment depreciates or is added to your business.

Daily/Weekly Sales

Keeping an eye on daily and weekly sales is essential. It helps with staffing and priorities inside the office. Start looking for trends. Are Tuesdays particularly good for you? Is the 2nd week of the month quiet? By knowing this information it can help you to correctly staff at key times throughout the year, as well as help you to initiate new marketing programs or sales initiatives before a downturn has gone too far.


It is just a part of business – some of your customers will be slow to pay. It is important to acknowledge how much is due to you, and when you can expect payment. When necessary, you can initiate formal collection processes.

Monthly Balance Sheet

A monthly balance sheet will break down your current assets, fixed assets, and liabilities. It is a good quick snapshot of your current financial situation.

Monthly Income Statement

A running monthly income statement allows you to track how your marketing and sales efforts are going, the cost of goods sold, the gross profit and expenses. It is a great way to see your net income for the month to track seasonal trends, and more.

Cash Flow Statement

This report is often a favorite among entrepreneurs and small business owners – when things are going well. It shows you the cash that has been generated from sales, for any given period you desire. If you are running a special, launching a new project or just want to know more about when money is coming in – use this report.

Monthly Sales Reports

Chances are, you know what months are best for your business. However, a monthly sales report should be more than just a record of sales. It should be a customizable report that you can sort by customer, sales person, product or promotion, to help you keep track of your sales initiatives.

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