The review in four steps
- Gather. Bank statements, the debtors age analysis, the monthly income statement, sales by customer and the tax due in the next 90 days. Ask your bookkeeper for them by the same date each month.
- Fill in the sheet. One row per number, this month next to last month.
- Read across. Note any two numbers that moved together, then look them up under reading them together.
- Decide one thing. Write one action, or one question for your accountant, and a date.
The review sheet
Start with six numbers. Add tax set aside, revenue trend, customer concentration and net margin when you are comfortable.
| Number | Where to find it | Last month | This month |
|---|---|---|---|
| Available cash | Bank balance, tax owed, bills due | ||
| Runway | Cash, and cash in and out for three months | ||
| Debtor days | Debtors age analysis and credit sales | ||
| Gross margin | Income statement | ||
| Break-even | Fixed costs, including your pay, and gross margin | ||
| Paying yourself | What you took home, and net profit after your pay |
Read each number against last month and against your plan.
When two numbers move together
- Profit is up, cash is down
- Sales are up, margin is down
- Sales are flat, costs are creeping up
- Cash is fine, one customer is most of my sales
- Breaking even, taking nothing home
- Everything looked fine until the tax bill
Questions people ask
How often should I review my numbers?
Monthly is the minimum for most businesses. If cash is tight, check available cash and debtors every week.
What if my accounts are more than a month behind?
Ask your bookkeeper to catch up first. A review of old numbers gives old answers. Until then, use the bank balance and the debtors list, which you can update yourself.