Many business owners avoid their numbers because they feel complicated. The truth is, you only need to keep an eye on a handful of them to stay on top of your finances. These numbers reveal whether your business is thriving, struggling, or somewhere in between.
Here are five numbers you should track consistently:
1. Revenue
- The total amount of money your business brings in before expenses
- Track monthly and year-to-date revenue to spot trends
- Compare results with your goals to see if you’re on target
2. Profit
- What’s left after expenses are subtracted from revenue
- Profit tells you if your business is sustainable, not just busy
- Even small increases in profit margins can have a big impact
3. Accounts Receivable
- Money clients owe you that hasn’t been collected yet
- Monitor overdue invoices to prevent cash flow problems
- Put systems in place to follow up quickly on unpaid balances
4. Expenses
- Track both fixed costs (rent, payroll, subscriptions) and variable costs (supplies, marketing, travel)
- Identify where your money is going each month
- Look for patterns and opportunities to cut unnecessary spending
5. Cash Flow
- The movement of money in and out of your business
- Positive cash flow means you can cover bills, pay yourself, and invest in growth
- Negative cash flow signals you need to act quickly, either by collecting payments faster or controlling spending
Keeping an eye on these numbers doesn’t require advanced accounting knowledge. A simple monthly review of revenue, profit, receivables, expenses, and cash flow gives you the insight you need to make smart decisions.
Instead of waiting for tax time to see how you’re doing, start checking these numbers now. Doing so helps you avoid surprises and gives you the confidence to steer your business forward.
If you’d like a simple system for tracking these numbers, Cheryl’s bookkeeping services can help you set it up and stay on track. You can also reach out through the contact page to schedule a consultation.
