Our friend Ruth King says financial statements are our scorecard. We need them on time to properly price our offers, make good decisions to earn a profit, spot minor issues and resolve them before they become major crises.
A financial statement prepared by the company’s accountant quarterly is unacceptable. Boxes of receipts delivered to our accountants at the end of the year are unacceptable. Timely, accurate financial statements on the last business day of the month help you spot and fix minor problems before they become major ones. Our long term survival depends on them.
The first thing to do with financial statements is a quick review. If something looks wrong, question it and get it right before going any further. Is income up or down from this month last year? How about payroll and other expenses? Do you know why they differ? Is this a good or bad sign?
Calculate ratios which answer:
- Can we pay all of our bills?
- Are costs too high?
- Do we have a collections problem?
- A personnel productivity problem?
- Are we carrying too much debt?
Ruth’s “The Courage to be Profitable” explains each ratio in detail. It’s available on Amazon. For an autographed copy, call her at 770-729-0258.
We share such ideas in “Maverick Entrepreneurs’ Million Dollar Strategies.”
For a $20 personally autographed copy, contact us at 803-359-7633 or email JerryBellune@yahoo.com . For an electronic copy click here to see the book on Amazon.
Copyright 2019, The Bellune Co., Inc.