You don't need to be an accountant to get useful information from your financial statements.

Start with three reports.

1. Profit & Loss Statement

The question it answers:
Is my business making money?

Your Profit & Loss statement shows your income and expenses over a specified period and ultimately your profit or loss.

Don't just look at the bottom line.

Compare:

• This month to last month,
• This year to last year,
• Actual results to your expectations, and
• Individual expense categories over time.

Unexpected changes are often more informative than the total itself.

2. Balance Sheet

The question it answers:
What does my business own, owe, and have invested in it?

The Balance Sheet includes assets, liabilities, and equity.

It can help you understand your business's cash position, outstanding debt, customer receivables, credit card balances, and other financial obligations.

If you're only reviewing your Profit & Loss statement, you're seeing only part of the picture.

3. Accounts Receivable Aging Report

The question it answers:
Who owes me money—and how late are they?

A business can report strong sales and still struggle with cash flow if customers aren't paying promptly.

Review your aging report regularly and follow up on overdue balances before they become much harder to collect.

Create a monthly habit

You don't have to spend hours reviewing reports.

Even a consistent 15- or 20-minute monthly review can help you spot unusual trends and identify questions that deserve a closer look.

The goal isn't to become an accountant.

The goal is to understand what your numbers are telling you about your business.

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Under U.S. Treasury regulations, any tax advice in this communication is not intended or written to be used to avoid IRS penalties. Tzinberg & Associates provides this information for general guidance only. It does not constitute tax advice, accounting services, investment advice, or professional consulting. Consult a professional adviser before making decisions or taking action, as the information is provided "as is" without any warranties regarding its completeness, accuracy, or timeliness.