Non-Negotiable: 3 Bookkeeping Reports to Review Monthly

1. Profit & Loss (P&L) Statement

The P&L statement shows your revenue, expenses, and net income over a given period.

Why it matters:

• A tool to determine whether your business is profitable.

• Helps to track where your money is coming from and where it's going.

• Allows you to compare results month-over-month - spot trends, variances, what works, what doesn't

Example: If marketing spend increased but revenue didn’t, it may be time to reconsider your strategy.

2. Cash Flow Report

Profit does not always mean cash on hand. The cash flow report shows money coming in and going out, enabling monthly oversight on whether you have enough to cover bills and payroll.

Why it matters:

• Provides insight and enables planning to cover expenses.

• Highlights timing issues with receivables - are customers paying late?

• Gives you confidence to plan for growth or major purchases.

Example: You may be profitable on paper but if receivables aren’t collected promptly, cash flow could be tight.

3. Balance Sheet

Your balance sheet is a snapshot of your business’s financial health at a given point in time. It shows what you own (assets), what you owe (liabilities), and the net value of the business (equity).

Why it matters:

• Helps you track debt levels and ensure they’re manageable.

• Shows whether your assets (like cash and receivables) are keeping pace with your liabilities (like loans and payables).

• Gives you the big-picture view lenders or investors may ask to see.

Example: If liabilities are increasing faster than assets, it’s a red flag that you may need to adjust operations or financing.

These reports are powerful tools for spotting trends, planning ahead, and making informed business decisions. The key is consistency, something that Palm and Prairie Bookkeeping will help with by providing these reports. Reviewing them every month helps you stay proactive rather than reactive.

If you're not sure where to find these reports, or if your books are in need of a historical catch up or clean up for accurate reporting, we'd love to help.

Reach out to us at palmandprairie@gmail.com or visit palmandprairiebookkeeping.com to learn more about how we can support you.