Monthly Financial Statements
The Admission Ticket To The Game
Imagine showing up at a professional sporting event without a ticket. You can hear the crowd, smell the popcorn, and sense the excitement—but you're stuck outside the stadium. You can guess what’s happening based on the cheers and sounds, but you can’t actually see the game or make sense of the plays unfolding on the field.
That’s exactly what it’s like to run a business without reviewing your monthly financial statements. If you’re not consistently receiving, reviewing, and acting on your financial statements, you’re standing outside your own company’s game. Not having monthly financials isn’t just a missed opportunity—it’s a fundamental weakness that could jeopardize everything you’ve built.
Let’s talk about why these statements are your ticket to the game and what you’re missing if you don’t use them.
1. Financial Statements: The Baseline for Performance Analysis
By the time your business is established with customers, products, and operations, maintaining success requires more than gut instinct or glancing at the bank balance. Monthly financial statements provide the foundation for understanding the reality of your business’s performance.
These statements don’t just show revenue and expenses—they reveal the underlying dynamics that determine profitability, solvency, and growth potential. Without them, you’re steering the company blind.
Key reports to track every month:
Income Statement (Profit & Loss): What happened with revenue, expenses, and profit during the month? Where are costs creeping up? Which revenue streams are underperforming?
Balance Sheet: What does your company own and owe? Are assets being deployed effectively? Is your working capital sufficient?
Transaction List (General Ledger): This provides the details behind the summary numbers, allowing you to track anomalies or concerning trends.
Without these three core reports, you’re guessing. And businesses don’t thrive on guesses.
2. Risk Exposure: The Silent Threat of Not Knowing
Growth brings complexity. As your team expands, cash flows become more intricate, vendor relationships multiply, and financial activities happen across multiple departments.
When you’re small, you might get away with managing from instinct. But as your business grows, the risks of ignoring your monthly financials grow significantly.
What can go wrong when you skip monthly reviews?
Fraud Goes Undetected: As your company grows, you lose line-of-sight on every transaction. Fraud often starts small—an extra expense here, a missing payment there. Monthly statements help you catch discrepancies early.
Cash Flow Surprises: You might be profitable on paper, but if customers are slow to pay, you could find yourself short on cash when payroll hits.
Poor Pricing Decisions: Cost creep can erode margins without obvious warning signs. Regular reviews help identify when pricing adjustments are necessary.
Tax and Compliance Risks: Errors in how transactions are recorded can snowball into significant problems come tax season.
3. Insights for Decision-Making: Turning Data into Strategy
As an owner, you’re likely focused on more than just survival. You’re thinking about scaling operations, entering new markets, or optimizing profitability. Monthly financials provide the context needed for these strategic moves.
For instance:
Profitability by Segment: Are certain product lines consistently underperforming? Are others showing potential that justifies increased investment?
Operational Efficiency: Are overhead costs rising faster than revenue? Are certain departments exceeding budgeted expenses?
Sales and Marketing ROI: Are marketing dollars generating proportional returns? Are customer acquisition costs trending in the right direction?
Without this data, strategic decisions become educated guesses. With it, you can pivot from hunch-based management to performance-driven leadership.
4. Cultural Impact: Building a Financially Aware Team
Financial statements don’t just benefit the owner—they create alignment throughout the leadership team. When managers regularly see financial results, they begin to understand how their decisions impact the bigger picture.
Tips for fostering financial awareness:
Share relevant reports with department heads.
Hold monthly financial review meetings to discuss trends, challenges, and wins.
Encourage managers to ask questions, just like you do, and provide training to boost financial literacy.
The result? A team that makes better decisions because they see the whole field, not just their own section of it.
5. Overcoming Common Barriers
Even seasoned business owners sometimes avoid their financials. Here’s how to address some common obstacles:
“I Don’t Understand the Numbers.” Financial statements aren’t rocket science—they just require consistent attention. Start with the basics and ask why when something looks off. A good part-time CFO or external accountant can help explain patterns and terms.
“I Don’t Have Time.” If you don’t have time to understand your business’s financials, you’re operating on hope, not strategy. Block out one hour a month for review—it’s time well spent.
“My Bookkeeper Already Looks at It.” Your bookkeeper records history. Your job is to use that history to shape the future. Bookkeepers focus on accuracy; you need to focus on insights.
Final Thought: Get in the Game
Monthly financial statements are more than numbers on a page—they’re the ticket that gets you into the game of running a successful, scalable business. If you skip this step, you’re left guessing, reacting, and hoping.
So, print out your statements, grab a pen, and start asking why. Get curious. Get involved. Get in the game. Because no business should be standing outside the stadium while the game plays on without them.