I Have No Idea How Much Money I Made Last Month!!!

Photo by Andrea Piacquadio from Pexels

Have you ever said this to yourself?

It is a common mantra among entrepreneurs who are so busy doing the daily work in their business that managing the financial performance of it gets lost in the sauce. This month we are taking a look at why it is important to track your business bookkeeping inside of an accounting software. One of the main reasons is to have the ability to answer the question: How Much Did I Make In My Business?

The best way to get this answer is to keep your books reconciled on a monthly basis. The art of reconciling the books just means grabbing your bank statement and literally matching it line by line item to what is showing in the accounting software. Once everything has been accounted for then you know that your books have been reconciled and can close the month and start fresh in the next month. Now bookkeeping and accounting is way more complex than pulling out a statement to match transactions but doing this aspect of it is necessary to pull reports that answer questions like the one above. 

So if you have no idea how much money you made last month then head over to the reports section in your accounting software and find the profit and loss statement or what it is known as in the accounting world, income statement. The income statement or profit & loss will tell you the story of how much you made by selling your services or products, what you spent on expenses and what was left over. The “what is left over” part will tell you how much you made in your business last month. 

Keep It Sunny!