Month End Close: Key Reasons for Financial Statement Analysis

Tulsa Financial Reporting Services

Wouldn’t you like to know how healthy your business actually is? For small business owners, this information is more important than ever before. What if we told you that there is a tested process of uncovering the secrets about your business that has been passed on through generations and generations of accountants?!

Financial statement analysis is one of the best ways to accurately gauge the health and status of your business. In this post, we will discuss some of the benefits of using financial statement analysis in your small business.

Why is Financial Statement Analysis Important?

According to, “Financial analysis determines a company’s health and stability. The data gives you an intuitive understanding of how the company conducts business.”.

Financial analysis is important during month-end close when reconciling bank statements. At no other time is it more important for business owners to ensure that their books are in order. Our team at LUXA is passionate about informing business owners of the many ways that using financial statement analysis can benefit their daily operations.

Show Me the Money

Do you want your employees to contribute to your financial goals? We have pondered this very question when conducting our own financial statement analysis and how each employee sees themselves as part of the bigger picture. There is key data in your reports that can be broken down to enlighten and motivate your staff to a better economic outcome for your business.

Cash Flow Statement: Accounts Receivable

One way to protect the cash-on-hand in your business is to collect outstanding receivables. It is important to discuss with your accounts receivables group what your goal is for collecting on outstanding debts. Quite often, the business emphasis is on the ‘top line’, i.e. sales. However, collecting on these sales requires as much, if not more, attention to ensure positive cash flow.

Income Statement: Bonus, Incentives, & Profit Sharing

This is the part of the financial statement that determines the “healthy picture” of your business. Bonus plans and incentives are a good way to reward your team and demonstrate the “healthy picture” of the company based on their hard work.

Visiting with an experienced CPA, CFO, or HR professional is the best way to design a bonus and incentives plan that best suits your organization.

Balance Sheet: Talk With Your Accountant

Your balance sheet is the key to knowing what assets you have, compared to the current liabilities of your business. The difference between the two will result in seeing your shareholder’s assets or profits to that of the owners.

Decisions you have made or need to make that affect the liquidity of your business are recorded here. Meeting with your accountant is key in determining the right time to sell timed assets without losing value to the company.

In The End

Knowing more about your financial statements can not only tie-in the overall contribution of your employees but will also improve your understanding of the future of your company. An experienced Tulsa accountant is a valuable asset in this process.

More importantly, recent trends suggest that it is wise for business owners and executives to outsource their accounting needs by working with top talent from local agencies.

If you are needing help with your books through good financial statement analysis, we have certified outsourced bookkeepers ready to assist your business. Contact our team today for more information on our Tulsa accounting and bookkeeping services.

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