At least once a month, you should print out the following reports and look at them carefully:
- Balance Sheet
The Balance Sheet shows the financial position of your company, listing business assets on the left and business liabilities and owner's equity/retained earnings on the right.
- Profit and Loss or Income Statement
The P&L shows your business income (sales) and expenses for the month. Note that expenses are listed as a percentage of sales. You can use this information to see if expenses in any category increase as a percentage of sales.
- Accounts Receivable Aging
Print out a monthly report to see what customers owe you money and how long these amounts have been unpaid. Actively seek to collect money from people who have unpaid balances.
