Do you have a shoebox of receipts that sits in your office and gets more and more full every month until tax time comes when you deliver said shoebox to your CPA? Is your bank account linked to your Quickbooks, and the transactions just stream in, never to be categorized or reconciled? Do you only look at your income and expenses and nothing else?

If this is you, you’re missing the bigger picture when it comes to your company’s financial health. Just like if you went to the doctor for a bad cut and your temperature and blood pressure came back normal, so they pronounced you in perfect health.

Why is the bigger picture important? Have you ever asked yourself questions like: Can I afford to hire another employee? Can we afford to expand into a new space? Am I making more of a profit this year than last year? If so, the answers are intertwined.

So how do you know if your business is the picture of health or if it needs stitches? This is where your financial statements come in. There are three main financial statements that when viewed together, tell you everything you need to know. For the next few posts, we’ll talk about each of these financial statements and what they tell us.

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