Regularly Review Your Financial Statements
Truly, truly, I’m not trying to increase the headache factor of you running your small business. The whole purpose of this book is to make your small business’s accounting flow more smoothly. But nevertheless, I want to add a task to your to-do list: You need to regularly review your financial statements.
In other words, regularly produce and look over the profit and loss statement that QuickBooks effortlessly generates. Get habitual about looking over your balance sheet with its lists of assets and liabilities. Explore and find another report or two that gives you useful insights into the rhythms and rhymes of your business. (Any errors you make will probably show up as goofy numbers on your balance sheet, by the way.)
Probably, you can keep a pretty firm handle on the operation by looking at two or three easy-to-understand reports. And by regularly peeking at these financial statements — say a time or two a week — you turn your accounting system into a tool useful both for spotting tempting opportunities and for avoiding dangerous traps.