042 2 Financial Reports Smart Business Owners Review Each Month

Time to push past your fear of bookkeeping reports! Let’s do this together. OK, want to learn about balance sheets and income statements?

Reviewing both reports gives a complete financial picture — one shows what you have and owe (Balance Sheet), and the other shows how you’re earning and spending (Income Statement).

Your balance sheet tells what you own, owe, what’s left. Key sections of the balance sheet will tell you:

• Assets: Cash, accounts receivable, inventory, etc.
• Liabilities: Loans, unpaid bills, etc.
• Equity: Owner’s equity, retained earnings.

Why review your balance sheet? We’re looking for how liquid you are and your debt to assets ratio.

OK on to the income statement. This report shows your revenue, expenses, and profits or losses over a period of time. Key sections of the income statement will tell you:

• Revenue: Income from sales or services.
• Expenses: Costs like rent, payroll, and utilities.
• Net Income: Profit or loss after expenses.

Why review your income statement? We want insight into the profitability and operational efficiency of your business so you can understand where money is coming from and where it’s going.

Listen to the end for more smart tips on how to evaluate profit margins, control expenses, and identify trends (e.g., comparing month-over-month revenue).

My challenge to you: Go run these 2 reports. What do you notice in your business?

• Is there something wrong that needs to be fixed?  Reach out here!
• Did you gain any new insights into your business?

I’d love to hear from you so let me know! 

 

 

Learn more about bookkeeping help from Erika here:

https://erikamillard.com/ 

 

Mini Course- Get Comfy with Budgeting

https://erikamillard.com/budget

 

Get Comfy with QuickBooks

https://erikamillard.com/get-comfy-with-quickbooks

 

Don’t forget to download the free Monthly Bookkeeping Checklist:

https://erikamillard.com/bookkeeping-checklist 

 

Using AI in QB Video Tutorial

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Happy Bookkeeping!