Review your financials with your accountant monthly!

· Accounting,Planning

People like to think they know how much they have in their bank account. Or they think they know if their can spend money or not. You’ll be surprised of how many times I hear, “Why do I need to review my financials monthly? Do the numbers really change from month to month?”


The answer to both questions is YES! Yes, you need to review your financials monthly and yes, the numbers can change from month to month. But not only do we want to look at the number, but we want to see what the numbers are doing. We look for trends, either downward or upward. We look at each month and compare them, what was happening one month but not the other.


We need to be prepared. As mentioned in Understanding Financial Statements, you really want to see your P&L and Cash Flow statement. Want to make sure you are having profitable months, and if not, understand why not. And if you’re not having profitable month, see where is the money going? This is where your cash flow statement comes into play. There could be a lot of money that is being paid out to Liabilities (which shows up on your Balance Sheet and not your P&L). Liabilities is a debt and trust me paying off debt is one of the best things you can do, but there should be a plan. You don’t want to be spending money just because your bank account says you have it. This is where you get into trouble.


Story time:

*While working with one of my clients we were going over their P&L, I notice that they were paying their insurance too much. I suggested that they talk to their insurance agent about their quote or talk to different agent to getting a better quote. I also noticed they were paying too much for payroll fees, so I had them get some quotes and call their current provider. They found out they were paying $250 a month too much and got their current provider to reduce their fees. By the end of the day, they had a savings of over $100,000 a year by going over their financials and getting a different perspective. *


Have a meeting once a month with your accountant to go over the numbers. In that meeting make sure you create a plan for the next month, and go over the previous months plan, and see what work and what did not, and then make the adjustments needed moving forward. Plan, plan, plan and don’t hesitate to ask questions.


If you need some help, schedule an appointment with us, and we can get you started on the right path.

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