Review your business books twice a month, on the 10th and 15th, so you only check two weeks of transactions at a time. Use accounting software to pull a profit-and-loss statement and catch errors early, avoiding the chaos of year-end scrambling.
Today I wanted to talk to you about reviewing your books. And for you to understand where I'm coming from, I want you to think about this scenario where you have a member who believes in exercise, but they just seem to put it off. And then at the end of the year, they take one day and they try to make up for the entire year worth of missed exercise. That's not a good idea. Workouts. You and I both know how disastrous that outcome can be. Sometimes this is how we approach reviewing our books as owners. We understand it's important, but we keep putting it off for whatever reason. Some— well, it's not— most people don't enjoy doing it, okay? I get it. But then we cram the reviewing our books at the end of the year when we need to file our taxes. Or maybe we need to get a loan. It's the exact same scenario as the one person who's missing out on exercising. The level of health that your business can have, just like the level of health this individual would have, isn't going to be very high because we're trying to cram a lot of work in, uh, it's just in too short of a time frame. So we follow the method of Profit First. And in Profit First, we encourage everyone to review their books twice a month, generally on the 10th and the 15th. Those are the 2 dates that we recommend because those are about 15 days apart. This way, as you sit down and review your books, you only actually need to start looking at the previous 2 weeks, which ends up not taking a lot of time, especially when you compare it to how much time it's going to take you if you're just putting it off at the end of the year. So reviewing your books is important. We encourage you to do it twice a month, the 10th and the 15th, looking at every transaction. One of my favorite ways to do it is if you have an accounting software, which hopefully you do, pull up a profit and loss by month statement. So then you'll have each column is going to be a different month. And I like using this method because then my eyes— and you, you would eventually get in this habit too— you'll be able to see some discrepancies in different categories that you have. And this will allow you then in your software to drill in and see maybe there's some accounting that's been— some transactions that have been misclassified. Maybe you're going to find there's transactions that weren't entered. Um, but it's a really healthy way to stay on top of your business finances. So review your books twice a month. Thanks.
