Get More from your Financial Statements

Here’s a quick post from our friends at Profit Mastery about how to get more/better information from our financial statements. It includes the announcement of their new Profit Gap financial reporting service that definitely will help small business owners get more from their financials.

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 Ten Ways to Get Better Information from Your Financial Statements

1. Group your P&L expenses by category such as sales and marketing expenses, occupancy, etc and not alphabetically.
2. Have your P&L and Balance Sheet produced on a monthly basis.
3. Get your statements in a timely manner. You should receive monthly statements by the 15th of the next month and finalized year-end statements by the end of the 1st quarter of your new fiscal year.
4. Run your Profit Gap reports and review monthly…this will keep you on track toward your goals and show you where your best opportunities for improvement lie.
5. Create a point of sales system that ties into your financial statements so you know your true inventory number.
6. Know your real gross margin percentage by knowing your true inventory number. (see #5)
7. Try to minimize what you put into your miscellaneous expense account.
8. Avoid having too many categories, or at least have P&L and Balance Sheet reports that roll up into one page.
9. Have your P&L and Balance Sheet reports show both dollars and percentages so you can see whether changes are due to changes in volume or true increases in costs and then compare them to industry standards.

If your accountant or bookkeeper can’t do all of the above, get them trained, better advised or replaced.

Here’s one more idea…at Profit Mastery we have just introduced a new report service called Profit Gap. The reports are designed to save you time and find the cash that is hiding in your financial statements. Check out Profit Gap now at www.financialsoft.biz/profit-gap-2/