What financial reports should I receive every month from a bookkeeper?
Every month you should receive the three core financial statements: a profit and loss statement, a balance sheet and a statement of cash flows. Many owners also benefit from accounts receivable and accounts payable aging reports. SmartGrowth Bookkeeping prepares these from reconciled books in QuickBooks or Xero, so the numbers reflect what actually happened in your bank accounts.
| Report | What it answers |
|---|---|
| Profit and loss (income statement) | Did the business make money this month, where did it come from and where did it go? |
| Balance sheet | What does the business own and owe right now? |
| Statement of cash flows | Why did cash go up or down, even when profit says otherwise? |
| Accounts receivable aging | Who owes you money, and how late are they? |
| Accounts payable aging | Which bills are coming due? |
A useful report package also compares periods. This month against last month, and this year against the same months last year, shows trends a single month hides.
Owners who want forward-looking numbers add budgeting and profit analysis to compare actual results with a plan.
Can a bookkeeper help me understand my profit and loss statement?
Yes. A good bookkeeper should explain your profit and loss statement in plain terms: what came in, what it cost to deliver, what overhead you carried and what was left. SmartGrowth Bookkeeping walks owners through their numbers, points out what changed from last month and why, and answers questions by video or phone call.
A profit and loss statement reads from top to bottom like the story of your month:
| Line | What it means | Example: a dental office |
|---|---|---|
| Revenue | Everything you billed or sold | Fees for treatment, from patients and insurance |
| Cost of goods sold or direct costs | What it cost to deliver that revenue | Lab fees and dental supplies |
| Gross profit | Revenue minus direct costs | What the chairs earned before overhead |
| Operating expenses | The cost of running the business | Rent, staff wages, software, marketing |
| Net profit | What is left after everything | What the practice actually earned |
Revenue and profit are not the same thing, and confusing them leads to expensive decisions. Our guide on revenue vs. net profit explains the difference with examples.
A profitable month can still leave the bank account lower. Loan payments, owner draws, inventory and slow-paying customers all affect cash without showing up as expenses on the profit and loss.
Can a bookkeeper help me figure out if my business is actually profitable?
Yes. A bookkeeper can show whether your business is truly profitable by recording every cost in the right place, reconciling the accounts and producing an accurate profit and loss statement. SmartGrowth Bookkeeping adds financial insights on top, such as profit by service line, job or location, so you can see which parts of the business earn money and which only keep you busy.
Many owners judge profit by the bank balance. That works until a tax bill, a slow month or a loan payment arrives. Real profitability shows up only when the books capture every cost, including the easy ones to forget.
Costs that often go missing from a do-it-yourself profit number:
- Card processing and marketplace fees taken out before deposits land
- Business purchases made on a personal card
- A fair wage for your own time, which a sole owner's profit figure often leaves out
- Vehicle costs, equipment wear and annual software renewals
- Refunds, chargebacks and invoices that will never be paid
If profit looks fine but cash is always tight, cash flow management is the next step.
What is included
Profit and loss
A monthly income statement showing revenue, costs and net profit.
Balance sheet
What the business owns and owes at month end.
Cash flow statement
Why cash moved up or down during the month.
Aging reports
Receivables and payables aging, so you see who owes what and what you owe.
Period comparisons
This month against last month and against the same month last year.
Plain-English review
Questions about your reports answered by video or phone.
Reports you can trust start with reconciled books
A report is only as good as the books behind it. If the accounts are not reconciled, a profit and loss can look precise and still be badly wrong.
That is why SmartGrowth reports come from books that have been categorized and reconciled first, as part of monthly bookkeeping.
What owners do with monthly reports
| Decision | Report that helps |
|---|---|
| Can I hire another technician? | Profit and loss trend plus cash flow |
| Should I raise prices? | Gross profit by service or product |
| Can I take a draw this month? | Cash on the balance sheet and upcoming bills |
| Am I ready to apply for a loan? | Year-to-date profit and loss and balance sheet |
| Which customers need a reminder? | Accounts receivable aging |
Lenders ask for the same statements. If financing is on your list, see loan-ready financial statements.
How to read your balance sheet
Owners tend to skip the balance sheet, yet it answers questions the profit and loss cannot. It is a snapshot of one day: what the business has, what it owes and what is left for the owners.
| Section | What to look at |
|---|---|
| Assets | Cash in each account, money customers owe you, inventory and equipment |
| Liabilities | Credit card balances, loans, unpaid bills and sales tax collected but not yet paid |
| Equity | What the owners put in, took out and earned over time |
Three quick checks each month: does cash match the bank, is the amount customers owe growing faster than sales, and are card and loan balances moving the way you expect. If any answer surprises you, ask your bookkeeper before making a decision on it.
Who gets the reports
You do, and anyone you choose: a business partner, your CPA or your lender. Because the books live in your own QuickBooks or Xero file, you can also run reports yourself at any time between monthly updates.
More questions
Will my reports be on a cash or accrual basis?
Either, depending on how your books are kept and what your CPA prefers. Some owners look at both: cash basis to see money in and out, accrual to see what was earned and owed.
Can I get reports by location or service line?
Yes, when the books are set up to tag transactions that way. QuickBooks uses classes and locations, and Xero uses tracking categories, so every report can be split by part of the business.
What if a number in my report looks wrong?
Ask. A surprising number is either a real change in the business or an entry that needs correcting, and your bookkeeper should be able to tell you which.
Do you prepare statements for investors or partners?
SmartGrowth prepares financial statements from your books that you can share with partners, investors or lenders. If an investor requires audited or reviewed statements, that work is done by a CPA firm.