Business owners often track sales closely but overlook other signals. A simple monthly review can reveal problems before they become emergencies.
1. Cash on hand
Know the amount available to pay upcoming bills, payroll, and taxes. Cash and profit are not the same thing.
2. Operating profit
Compare revenue with the expenses required to run the business. Look for changes in margins, not just changes in sales.
3. Outstanding customer invoices
Review how much customers owe and how long invoices have been unpaid. Slow collections can strain cash even when sales look strong.
Use these numbers alongside your balance sheet and cash flow statement, and discuss material concerns with your accountant or adviser.
Further reading: SBA: Manage your finances.
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