LESSON 16: Give your business a chance to speak back to Articles

LESSON 16: Give your business a chance to speak back to you, through monthly accounts

 Good quality feedback about your performance and financial position provides you with powerful information to drive your business forward and up. In fact regular reliable monthly management accounts are so essential to your ability to manage your business that it is all but impossible to make a long term success of your business without them. […]

16.1 Your monthly Profit and Loss Account is one of your key tools in building prosperity and security

 Every month you should have a Profit and Loss Account produced. It is vitally important for tracking sales and for comparing the costs you are incurring against the sales you are making. Why is profit important? Simply because profit is your only constantly renewable, inexhaustible, source of cash. The relationship between profit and cash can […]

16.2 Breathe meaning into your Profit and Loss Account by comparing your results against a yardstick

 As we have said, the most useful thing your Profit and Loss Account tells you is your net profit. Gross profit can sometimes be useful, sometimes not. However, what is always useful, along with your net profit, is being able to compare your Profit and Loss Account against some yardstick. The yardstick you use in […]

16.3 Why you need a monthly Balance Sheet as well as a monthly Profit and Loss Account

 It is common for business owners and managers to rely almost exclusively on the Profit and Loss Account, while ignoring the Balance Sheet. In many cases a Balance Sheet is not produced at all. However you should ensure that a Balance Sheet is produced along with every Profit and Loss Account. There are four reasons […]