Why This Matters

Monthly financial reviews help business owners identify problems while there is still time to respond.

Waiting until tax season may reveal what happened, but it rarely gives the owner an opportunity to change the outcome. Regular reviews make it easier to manage cash flow, control expenses, adjust pricing, and plan for growth.

Common Mistakes

• Looking only at the bank balance

• Reviewing revenue without considering profit

• Receiving reports but not understanding them

• Waiting several months for bookkeeping to be completed

• Tracking too many numbers without identifying priorities

• Failing to compare actual results with a budget or forecast

Harvest’s Recommendation

Create a simple monthly scorecard that includes the most important numbers for your business.

A useful starting point may include:

• Monthly revenue

• Gross profit and gross margin

• Operating expenses

• Net income

• Cash balance

• Outstanding customer invoices

• Upcoming bills and debt payments

• Payroll as a percentage of revenue

• Results compared with the monthly budget

• One or two industry-specific measures

Review the scorecard at the same time each month and document any decisions that come from it.

Good to Know

The goal is not to become an accountant. The goal is to understand enough about the numbers to recognize what is changing, ask better questions, and make informed decisions.

A shorter report that you understand is more useful than a complicated report you never review.

When It’s Time to Get Help

Consider speaking with a business advisor if:

• Your financial reports are several months behind

• You receive reports but do not know what they mean

• You are frequently surprised by cash shortages

• Your numbers do not match what you feel is happening in the business

• You need help identifying the right performance indicators

• You want to build a budget or financial forecas