What financial statements should you monitor?

Business Owners’ Financial Records Checklist

As business owners, you are tasked with acquiring new customers, managing your team, launching new products and countless other tasks. Let’s face it – most of us simply don’t have time to focus on our financial statements daily – or even weekly.  However, businesses need an effective system for conducting operations, complying with tax laws and providing essential financial information – especially to lenders and outside investors.

Think of monitoring your financial statements like monitoring your vital signs. Understanding the health of your company by utilizing timely and accurate reporting is a key tool that allows you to measure how the business is performing in terms of cash flow, sales growth, profit margin, and expense management.

So, what statements should you monitor? The Balance Sheet and Profit & Loss statements should be well known to every business owner, but many owners do not pay attention to the Cash Flow Statement which may be the most important statement. Close attention should also be paid to Accounts Receivable and Accounts Payable reports, and, of course, to your bank statement.

Steps to Ensure Your Financial Books Are in Order

Whatever size your business is, this Financial Checklist can help you get into the discipline of monitoring the above statements to ensure consistent financial health—and even spotting warning signs before cash flow emergencies strike.

Financial Records Checklist

  • Reconcile your bank accounts on a monthly basis; ensure deposits and cash receipts have been posted accurately and in a timely manner.
  • Cross-check daily sales log and cash receipts.
  • Review accounts payable each week – take advantage of discounts, if possible, and pay your  bills on time.
  • Monitor the status of accounts receivable weekly to check on past due invoices.
  • Inquire about unpaid invoices that are past due and address the issue in a timely manner.
  • Review your payroll and administrative expenses weekly.
  • Monitor any taxes due (federal, state, sales and property tax) to avoid fines and penalties.
  • Track the results of your marketing efforts – how much income is generated by marketing.
  • Review all account balances to ensure that transactions are properly posted and adjusted as needed.
  • At year end, prepare for 1099’s due in January. Begin to organize your W-9’s in December to avoid being rushed come January.

One of the ways B2B CFO® Partners help business owners is by taking tasks off the business owner’s to-do list. This helps them be more productive in the quest for new customers, opportunities and products. All business owners want more time to focus on the business and future goal-setting. Yet, too often business owners get stuck doing what we call “Minding” activities instead of “Finding” activities.

“Finding” activities involve leading the business with ideas, plans and developing the culture to make the business successful. “Minding” activities are necessary (accounting, cash management, financial statements, internal procedures and controls, etc.), but if too much time is spent on these by the business owner, the level of “Finding” activities suffer and the business may suffer. What affects could this have on you and your business?

Is it time to delegate the critical financial management of your business to a B2B CFO®? Contact me today to learn more about our tools, talents and processes.  AndrewTucker@B2BCFO.com


Share This: