Guide · Financial analysis
What a monthly read of your P&L should tell you
Most small businesses get a monthly report that lists numbers. That is not the same as being told something.
If you have a bookkeeper, you probably get a P&L and a balance sheet every month. They are correct and they are not much use on their own. A statement tells you what happened. It does not tell you which of the things that happened is worth your attention, and it certainly doesn't tell you what to do about it.
A finding needs three parts
Every signal we write has to survive the same three questions, or it doesn't go in the report.
- What moved. Stated against something - last month, the same month last year, the trailing average. A number with nothing to compare it to is trivia.
- What it might mean. Including the innocent explanation. Payroll rising faster than revenue for three months looks identical whether you overhired or hired ahead of a busy season, and the report should say that rather than pick the scary reading.
- The lever. The specific thing you could check or change this month. If we can't name one, the finding is an observation and belongs lower down the page.
The eight families we look at
Revenue and demand. Margin and profitability. Cost structure. Cash and liquidity. Working capital. Owner and related party activity. Data quality. Comparability. The last two matter more than people expect: a report built on statements that changed their own chart of accounts halfway through the year will show you a trend that isn't there.
Say what it doesn't claim
Every report we send ends with the checks we ran, the tie-out against your own printed totals, and an explicit list of what the report deliberately does not claim. If the two statements can't support a metric - and there are plenty they can't - we say so and say why, rather than computing it anyway and hoping nobody asks.
It should run on what you already have
A monthly P&L and a balance sheet. No new software, no dashboard to log into, no migration. What comes back is one file you can keep, forward to your bookkeeper, and open in three years and still understand.
Then the forecasting sits on top
Once the monthly read is running, the deeper work has something to stand on: cash flow forecasting, budget versus actual, customer and product profitability, scenario and runway modeling. Each needs a piece of data beyond the two statements, which is why we scope those with you instead of pricing them off a menu.