There’s no need to be anxious about maintaining accurate financial statements of your business’s cash flow. Contrary to popular belief, you do not need to be a monetary genius or have a university degree in order to balance the books. It may well be that in the early days of your small business you have very simple records which need little maintenance… even a spreadsheet will suffice. But even in the larger businesses the maths is pretty much the same. You simply need to know how much is coming in, how much is owed and how much you’ve spent. If you can grasp these three concepts, then you’re well on the way to coping with your accounts.

There is more that keeping regular accounts can do for your business besides showing profit and loss. By analyzing your accounts at the end of each month, it is possible to extrapolate data which suggests trends or patterns. These may, in turn, help you to establish directions, in which the business can be turned to make more profit, adapt its marketing or push in new way. By checking your figures at regular intervals you can identify clients who don’t pay on time, clients who always pay on time, jobs which take in most money, jobs which make very little profits and products or services which are becoming more popular.

Checking your accounting records every day, or even every week, may not provide enough information to reveal a trend. Similarly, looking back over a whole year means that any trends will be drowned by the overwhelming amount of data. But monthly and quarterly accounting checks and statements can certainly produce patterns and reveal a good deal about the viability of your business. They will also help you to implement changes so that by the end of the year you are in a much stronger position, and more aware of the direction your business is taking.