What Reports Should You Be Reviewing Monthly?

Running a small business is like steering a ship - you need a clear view of where you are, where you’ve been, and where you’re heading. That’s where monthly financial reports for small business owners come in. These reports aren’t just paperwork: they’re your financial compass.

If you're unsure what you should be reviewing every month, you're not alone. In this post, we’ll break down the essential financial reports that keep your business on track and thriving.

Why Monthly Financial Reports Matter

Think of your business like a car. Would you drive cross-country without checking the fuel gauge or engine temperature? Monthly financial reports offer the same kind of oversight - warning you about problems before they become emergencies.

Key benefits include:

• Catching issues early (like cash flow shortages)

• Making informed budgeting and investment decisions

• Tracking business growth and profitability

• Staying prepared for tax season and investor conversations

1. Profit and Loss Statement (P&L)

Also known as the income statement, the Profit and Loss Statement shows how much money your business earned and spent over the month.

What to look for:

• Total revenue vs. total expenses

• Gross profit margin

• Net income (or loss)

• Trends in income and expense categories

Why it matters:
It gives you a snapshot of profitability and helps you identify areas where you're overspending or underperforming.

2. Balance Sheet

The Balance Sheet shows your business’s financial position at a specific point in time. It details assets, liabilities, and owner’s equity.

Key components:

• Assets (cash, inventory, equipment)

• Liabilities (loans, credit card debt, unpaid bills)

• Equity (what the business actually owns after debts)

Why it matters:
This report tells you how financially stable your business is. It’s also critical for securing loans or attracting investors.

3. Cash Flow Statement

Revenue is great, but it doesn't mean much if your bank account is empty. The Cash Flow Statement shows how cash moves in and out of your business.

What to monitor:

• Operating activities (day-to-day cash flow)

• Investing activities (asset purchases, investments)

• Financing activities (loans, owner's draws or injections)

Why it matters:
Even profitable businesses can fail due to poor cash flow. This report helps ensure you always have enough to cover payroll, rent, and bills.

4. Accounts Receivable Aging Report

Are your customers paying on time? The Accounts Receivable (A/R) Aging Report breaks down who owes you money and how long they’ve owed it.

Sections often include:

• Current

• 30 days past due

• 60 days past due

• 90+ days past due

Why it matters:
Unpaid invoices can cripple your cash flow. Reviewing this monthly helps you follow up on overdue payments and avoid bad debt.

5. Accounts Payable Aging Report

This report shows what you owe to vendors and suppliers. It helps you prioritize payments and avoid late fees or strained relationships.

What it tracks:

• Outstanding bills

• Due dates

• Vendor balances

Why it matters:
Staying on top of payables improves vendor relationships and helps you manage cash more effectively.

6. Budget vs. Actual Report

This comparison report helps you measure your actual performance against your planned budget for the month.

What to analyze:

• Revenue and expense variances

• Over- or under-spending in specific categories

• Forecasting accuracy

Why it matters:
It reveals how well you're sticking to your financial plan and helps you course-correct for future months.

7. Sales Report

A monthly Sales Report helps you see what products or services are performing best and where growth is happening, or slowing down.

Look for:

• Top-performing products or services

• Sales by channel or salesperson

• Monthly sales trends

Why it matters:
Understanding your revenue drivers lets you double down on what’s working and tweak what isn’t.

Pro Tip: Automate Report Generation

Most accounting platforms like QuickBooks, Xero, or Wave can automate these monthly reports, so you’re not starting from scratch every month. Schedule them to be sent directly to your inbox so you never skip a review.

How to Use These Reports Together

Individually, each report tells part of your financial story. Together, they paint the full picture. Use them as part of a monthly financial review meeting, even if you're a solopreneur.

Suggested monthly routine:

1. Review reports from the previous month

2. Identify trends or red flags

3. Make adjustments to spending or operations

4. Set goals for the upcoming month

Final Thoughts: Monthly Reports, Major Impact

If you want to grow your business with intention - not just instinct, then monthly financial reports for small business owners are non-negotiable. They help you move from reactive to proactive, from chaos to clarity.

Start small. Even reviewing just your P&L and cash flow statement each month can transform how you run your business.

📌 Want to Know If Your Business Is Really Healthy?

At Breakspears Bookkeeping Services LLC, we help you:
✅ Track profit and cash flow side by side
✅ Get paid faster
✅ Build financial systems that support growth

👉 Explore our flat-rate bookkeeping packages
👉 Book a free discovery call to take control of your numbers—without the overwhelm.

How to Read Financial Statements (Even If You Hate Numbers)

Let’s get one thing out of the way: you do not have to be a math person to run a successful business.

But if you want to keep your business profitable, tax-ready, and growing in the right direction: you do need to understand your financial statements.

We’re not talking spreadsheets filled with jargon or pages of numbers that give you a headache.
We’re talking about simple, clear insights that help you answer questions like:

• “Am I actually making a profit?”

• “Can I afford to hire help?”

• “Why is there money in my account, but I feel broke?”

If you’ve been avoiding your financial reports, this post is for you. Let’s break down how to read financial statements for small business owners….even if you hate numbers.

🧾 What Are Financial Statements, Really?

Financial statements are the story of your business told in numbers.

They show how much you’re earning, what you’re spending, and how financially healthy your business really is.

There are three key financial statements every small business owner should review monthly:

1. Profit & Loss Statement (P&L)

2. Balance Sheet

3. Cash Flow Statement

Let’s walk through each one—in plain English.

📊 1. Profit & Loss Statement (P&L)

Also called the income statement, this report shows your business’s income and expenses over a set period (usually monthly, quarterly, or yearly).

💡 What it tells you:

• Are you making a profit or loss?

• What’s driving your revenue?

• Where is your money going?

🧠 Key sections to look at:

• Revenue – total money earned

• Cost of Goods Sold (COGS) – what it costs to provide your product or service

• Gross Profit – revenue minus COGS

• Expenses – operating costs like rent, software, marketing

• Net Profit (or Loss) – what’s left after all expenses

💬 If your net profit is consistently low or negative, it’s a red flag: either you’re spending too much or charging too little.

📄 2. Balance Sheet

Your balance sheet gives you a snapshot of your business’s financial position at a single point in time. Think of it like a selfie of your money.

💡 What it tells you:

• What your business owns (assets)

• What it owes (liabilities)

• What’s left over (equity)

🧠 Key parts:

• Assets – cash, inventory, accounts receivable, equipment

• Liabilities – credit cards, loans, unpaid bills

• Equity – the difference between assets and liabilities

💬 If your liabilities are growing faster than your assets, you might be relying too heavily on credit to keep your business running.

💵 3. Cash Flow Statement

This one is all about timing. You can be profitable on paper but broke in real life if your cash flow is off.

💡 What it tells you:

• Where cash is coming from (sales, loans, investments)

• Where cash is going (expenses, salaries, taxes)

• Whether you’re gaining or losing actual cash

🧠 Watch for:

• Consistent negative cash flow (means you’re spending more than you bring in)

• Big swings that could signal payment delays or seasonal dips

• Whether cash in your account matches what your profit & loss says

💬 Cash is king. If you run out of cash, even if your business is profitable: you can’t pay bills, staff, or yourself.

🧠 How to Actually Use These Reports (Without Getting Overwhelmed)

Reading your statements is only helpful if you know what to do with them. Here's a simple monthly routine:

1. Skim your P&L

   • Is your revenue trending up?

   • Any unexpected spikes or drops in expenses?

2. Look at your Balance Sheet

   • Is your cash decreasing while debt increases?

   • Any old unpaid invoices piling up?

3. Check your Cash Flow Statement

   • Are you burning through more cash than you’re bringing in?

4. Ask yourself:

   • Can I afford to reinvest, hire, or expand?

   • Should I cut costs or raise prices?

💡 At Breakspears Bookkeeping Services, LLC, we not only provide these reports: we explain them in plain, actionable terms so you can make confident decisions.

🙋‍♀️ What If You Still Don’t Understand Your Reports?

That’s okay. Most small business owners don’t learn this stuff in school, or even when starting out.

But now you know:

• These reports aren’t scary

• They don’t require financial genius

• They’re essential to building a business that lasts

You don’t need to master them, you just need to look at them regularly and know who to ask when something doesn’t make sense.

🧾 Final Thoughts: You Can Hate Numbers and Still Understand Your Finances

If you’ve ever said, “I’m just not a numbers person,” you’re not alone. But ignoring your financial statements won’t make the problems go away.

Understanding how to read financial statements for small business gives you the power to make smart decisions, grow sustainably, and sleep better at night knowing exactly where your money’s going.

📌 Want Help Making Sense of Your Financials?

At Breakspears Bookkeeping Services LLC, we don’t just keep your books: we help you understand them.

We provide:
✅ Easy-to-read monthly reports
✅ Friendly breakdowns (no jargon)
✅ Personalized advice to help you grow

👉 Explore our bookkeeping packages
👉 Book a free intro call and let’s demystify your numbers together.

Business Budgeting 101: How to Build a Budget That Works

If the word “budget” makes you want to hide under your desk, you’re not alone.

But here’s the truth: Your budget is your business’s blueprint. It’s not about restriction: it’s about direction.

Whether you’re running a freelance side hustle or managing a growing team, knowing how to create a business budget can be the difference between coasting and scaling, surviving and thriving.

Let’s walk through a simple, no-fluff guide to creating a budget that actually works for you…not just on paper, but in the real world.

💡 Why Your Business Needs a Budget

Before we dive into how to build one, here’s what a business budget really does for you:

• Helps you make smarter decisions with your money

• Keeps spending aligned with your goals

• Prepares you for slow months or unexpected expenses

• Shows investors or lenders that you’re financially responsible

• Gives you peace of mind (yes, really)

It’s not about micromanaging every penny: it’s about knowing what’s coming in, what’s going out, and what’s left.

🧩 Step 1: Know Your Income Streams

Start with the money coming in.

Write down all your income sources, including:

• Client payments

• Product sales

• Subscription revenue

• Retainer fees

• Grants or other funding

If your income varies month to month (hello, freelancers 👋), look at the past 3–6 months and take an average.
💡 Use the lowest monthly income as your starting point if you want to budget conservatively.

💸 Step 2: List Your Fixed and Variable Expenses

Next, identify where your money goes. Break it into two categories:

✅ Fixed Expenses (same amount monthly):

• Software subscriptions

• Rent or coworking space

• Internet/phone

• Insurance

• Payroll or contractor retainers

🔁 Variable Expenses (changes month to month):

• Supplies

• Advertising

• Travel

• Freelancer payments

• Continuing education or courses

💡 If you’ve just started your business, research average costs for your industry or ask your bookkeeper (like us!) to help estimate.

💼 Step 3: Don’t Forget the Hidden Essentials

These often get missed—but can derail your cash flow if ignored:

• Taxes: Set aside 20–30% of your net income

• Emergency fund: Aim for 1–3 months of business expenses

• Savings or reinvestment: For new equipment, rebrands, team hires, or growth

💡 Create a separate savings account for taxes and emergency cash. Out of sight = less temptation to spend.

📊 Step 4: Build the Budget

Now that you know your income and expenses, it’s time to put it all together.

Here’s a simple monthly layout:

💡 Use a spreadsheet or free tools like Wave, or sync with QuickBooks Online for live tracking.

🧠 Step 5: Check In Monthly

Your budget is a living, breathing document, not a set-it-and-forget-it task.

At the end of each month:

• Compare your actuals to your budget

• Note any major differences

• Adjust for the next month

💡 At Breakspears Bookkeeping Services LLC, we provide monthly reports to help clients see how their budget is tracking and where improvements can be made.

🔁 Step 6: Refine as You Grow

As your business evolves, your budget will too. You might:

• Add new income streams

• Drop expenses that don’t bring ROI

• Shift your marketing strategy

• Hire help or outsource tasks

Budgeting is a habit, not a one-time event. The goal isn’t to get it perfect: it’s to stay informed, make smart decisions, and avoid financial surprises.

💬 Final Thoughts: A Budget That Works With You, Not Against You

Learning how to create a business budget isn’t about becoming a finance expert. It’s about building a simple, sustainable habit that helps your business grow……and gives you the confidence to lead it.

You don’t need to track every penny, but you do need to know where your money is going, and what’s coming next.

And if you’d rather have support getting it set up and reviewed? That’s exactly what we do.

📌 Need Help Creating a Budget That Actually Works?

At Breakspears Bookkeeping Services, LLC, we help freelancers and small business owners build clear, effective budgets that support real growth.

👉 Explore our monthly bookkeeping packages
👉 Book a free 15-minute intro call to get started.