Simply looking at your financial statements and paying attention to them will make you money. If you are one of the many small business owners who doesn't even prepare financial statements until the end of the year and then only to appease your commercial loan officer and prepare a tax return, this obviously isn't simple for you. But the rest of you, if you will just pay attention, you can make more money.
In today's business world, everybody and everything competes for your attention. Employees have to be fired, employees have to be hired, past due receivables have to be collected, censuses have to be completed, equipment has to be purchased, and your spouse needs some attention. "Just give me the bottom line," you say, "That's what is really important." And I agree with you. Your bottom line is important. Important enough to watch, protect and improve.
Simply by paying attention to you income statement you might see a decreasing trend in your gross profit margin. Do you need to cut costs? increase prices? or check to see if somebody is stealing from you? You might notice that equipment repairs are twice as high as the previous year. Do you need new equipment? Financial statements give you immediate feedback on how well your business plan is working. Financial statements act as an early warning system when business sours. They give you information to make better decisions. Financial statements shouldn't be ignored.
For those of you who don't prepare monthly financial statements, your loosing out. Don't know how? I can help. 479-648-2846 or davidpotts@potts-cpa.com. If you need help reading your financial statements... same thing. Call me.
