Knowing your key financial information about your business is good business practice. From experience, I believe that this is such an important aspect of running a business.
You should know every bit of income that your business earns (where your income money is coming from). How is it recorded in the profit and loss statements and does it match the monthly income that the software programs say you are supposed to have.
You should also be checking through simple calculations that the management fees earned by your business for that month are like that earned for that month. This is knowing your statistics which I discuss in a separate blog. Anything that sways the figures, should raise questions.
Knowing every expense on your profit and loss statement is critical. Many business owners do not know what is included in the categories that make up their profit and loss statement. Learning the lesson of knowing your numbers will be one you will cherish forever.
Knowing your numbers shows you the transparency of your business and allows you to be able to know where you can reduce your business expenses quickly if you ever need too.
