Keeping track of how much you’re making and how much you’re spending can seem like a tedious waste of time when you’d rather be out there making money, we know! But at Dollars + Sense we think it’s almost impossible to overstate the importance of record-keeping to your business.
At its most basic level, a profit and loss statement is data. Information. And the more information you have, the better equipped you are to make informed and strategic choices about how you spend your time and what choices you make moving forward.
If things aren’t going well, data helps you to see where the issues may lie and make a decision on what needs to change, and if something is going well, it’s easy to see where you should be putting your attention to make more of that happen.
Data can be your best friend, if you know how to use it.
We see this data avoidance a lot in small businesses, who are either new to bookkeeping services or perhaps want to apply for a loan with a bank, and it may be the first time they’ve thought about their profit and loss statement. You can pull it together retrospectively, but you’ll have to make a fair few guesses and your figures won’t be an accurate depiction of what’s really going on.
We often see new clients come to us at Dollars + Sense, who are confused because they are making good money, but week after week, there’s no money left in the bank. Where did it go? Why is it so hard to turn a profit?
That’s where your profit and loss data can help. They can help you clearly see what activities are making you money and what activities are a drain on your finances.
It could be that you’re spending a lot of time on sales calls that don’t deliver enough income to justify your time away from billable hours.
It could be that those professional memberships you’ve invested in aren’t worth the investment.
There may be a cheaper phone or internet plan you could shift to.
But unless you sit down regularly, either on your own, or with the help of someone who offers outsourced bookkeeping services, these are drains on your bank balance that can continue on your business indefinitely.
Want help keeping track of your profit and loss?
Dollars + Sense offers tailored and personalised outsourced bookkeeping services to help you get a clear picture of where you are, and where you want to go.