The Monthly Financial Review

Part B: Understand the Money

We see a lot of owners avoid their numbers, and it is almost never because they are lazy. It is because looking feels like judgment. So the numbers wait in a shoebox, or a login they have not opened, until a tax deadline or a bank or a bad Friday forces the conversation.

Here is the fix I would give a friend: one hour, once a month, the same way every time. Think of it as a routine, like changing the oil, and not a big accounting project. It works because it is small enough to actually do, and regular enough that surprises stop being surprises.

The 60-minute routine

Block the hour on your calendar for the same day each month, ideally within the first week after the month closes. Close the phone. Then work through six stops.

• Minutes 0 to 10, gather. Download the bank and card statements, make sure every invoice you sent is entered, and enter the receipts sitting in your truck or wallet. Nothing gets analyzed yet.
• Minutes 10 to 25, read the P&L. Revenue, direct costs, overhead, net profit, each compared to last month. Circle anything that moved more than you expected. If you need a refresher, see Reading a Profit-and-Loss Statement.
• Minutes 25 to 35, check the cash. What is in the accounts today, how many weeks of cash does that give you, and how does it compare with what you forecast? If you keep a forecast, this is where you update it with what really happened. The method is in Building a 12-Month Cash-Flow Forecast.
• Minutes 35 to 45, chase the money. List every unpaid invoice, oldest first. Decide who gets a call this week, and put those calls on the calendar before you leave the room.
• Minutes 45 to 55, look at the dashboard. Update the few numbers you track and ask which one is drifting in the wrong direction.
• Minutes 55 to 60, decide. Write down one thing to change and one thing to keep doing before the next review.

Make it easy to repeat

The free Simple Business Dashboard on the Resources page is built for exactly this hour. It holds the handful of numbers you check each month on one screen, so you are not rebuilding the picture every time. Fill it in at minute 45 and you will see, over a few months, a line that tells you more than any single number could.

Two things keep the routine alive. First, always use the same order, because the order is what makes it fast. Second, always end with a decision, even a small one. A review that produces no decision is just a worry with a calendar invite.

Reviewing and bookkeeping are different jobs. Bookkeeping is recording what happened, and it can be done weekly, or by someone else. Reviewing is looking at it and choosing what to do next, and that part is yours. Nobody else can make the call about whether a slow month means you should pause hiring or push harder on marketing.

If you have a partner, a bookkeeper or a trusted manager, invite them for the last fifteen minutes. Saying your numbers out loud to another person has a way of exposing the ones you were quietly hoping to skip.

A word on tone. If you open the numbers and they are ugly, that is just information. I have fallen off track in my own affairs more times than I can count, and every recovery started with looking at where I really was. The review is you choosing to look. That alone puts you ahead of the owner with the shoebox.

Money hour

Pick the date of your first review and put it on the calendar as a recurring monthly event, sixty minutes, with the title “Money hour.” Then, the day before, spend ten minutes putting your statements and unpaid invoices in one folder so minute zero is easy.

Sixty minutes a month, plus about an hour of setup the first time if your records are scattered. It is free, and the Simple Business Dashboard and Monthly P&L Tracker cost nothing. If a bookkeeper prepares your reports, the review takes about the same, because reading and deciding stay with you.

What is the real reason you have not looked at your numbers lately?