Staying on top of your business numbers is like sitting on a three-legged stool. You need all three to make it work.
The most common question I get asked by my small business clients is: what should I be doing daily, weekly, monthly, quarterly, yearly in my business books?
If you do the following on a monthly basis, then you take care of the 95% of what you need to stay on top of your numbers.
Phase 1: Completeness
- Enter ALL your transactions into QB and reconcile every bank and credit card account by the middle of the following month. Even if you’re not sure where to code something…shove it into Uncategorized Income or Expenses and sort it out in Phase 2.)
- Once this phase is done and done well, it means that you have no duplicates or omissions in your books. You are sure that you have a complete record.
- Not guaranteed accurate, but guaranteed complete.
Phase 2: Accuracy
- Review your P&L and Balance Sheet and investigate whatever doesn’t look right for whatever reason and correct.
- Code anything you’ve shoved into Uncategorized.
- When done and done well, we are now guaranteed that all the transactions are in the right place.
Phase 3: Storytelling
- Now we can look at the numbers and have them tell us their story. How are you trending? What’s your profit margin overall? By customer?
- How are you doing against your budget? What changes might you need to make? The list goes on.
Phases 1 and 2 can be done by you or someone else, meaning a bookkeeper. But only you, the CEO, can use Phase 3. This last phase is why you keep books in the first place.
Have questions on how to do all three phases yourself? Hit me up in the comments section and let’s get this party started.
To your financial success.