How to read your monthly report in two minutes

On the 10th of every month, each of our clients gets a single page. Some read it in the car before work. One reads it to her husband over breakfast. Here’s how to get everything you need from it in about two minutes.

Start at the bottom

The last line is your profit for the month: money in, minus money out. If it’s higher than last month, ask why. If it’s lower, ask why. Either answer tells you something about your business.

Then look at the biggest expense

For most small businesses it’s payroll or rent, and that’s fine. What you’re looking for is anything that grew without you deciding it should. Software subscriptions are the usual suspect. They creep.

Check the cash

Profit and cash aren’t the same thing. You can have a profitable month and still feel broke if customers haven’t paid yet. The cash line shows what’s actually in the bank, and the line under it shows what you’re still owed.

Read the set-aside

Near the top, in the yellow box, is the amount to move into savings for taxes. Move it the day the report arrives. This one habit has saved more of our clients from April panic than anything else we do.

Ask one question

Every report ends with a line for your accountant’s notes. If something there doesn’t make sense, call us. A question costs nothing, and it’s the best two minutes you’ll spend on your business all month.