It’s a good idea to review your financial statements on a regular basis so you have an ongoing understanding of your business’s health. As we begin the fourth quarter, now is a great time to check in prior to year end. Here are four items you should review to get a complete picture of your business’s health.

  1. Balance sheet reconciliations. Each asset and liability account should be reconciled every quarter. Your balance sheet can guide decisions about cash reserves, debt financing, inventory management, receivables, payables and property. Routine monitoring can uncover vulnerabilities and allow for corrective action.
  2. Debt service coverage. Calculate your cash flow to ensure that you’ll be able to meet the principal and interest obligations for both current and future monthly loan payments.
  3. Projected revenue. Review your income statements to see how your revenue has performed so far this year. If revenue isn’t where you thought it would be, meet with your sales and marketing teams to try to pinpoint what didn’t perform as expected.
  4. Projected expenses. Review what your expenses are so far for the year. Compare those numbers to what you forecasted for your expenditures. Then update your forecast for the remainder of the year.

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