How Often Should You Check Your Financial Statements?

Running a small business is hard enough. Between managing employees, keeping customers happy, and juggling the day-to-day, it’s easy to let financial paperwork slide.

But here’s the truth: if you’re not checking your financial statements regularly, you could be missing key warning signs—or golden opportunities.

Think of your financial statements like the dashboard in your car. They tell you if the engine’s running hot, whether you’re low on fuel, or if it’s time for a tune-up. And just like your car, ignoring those signals for too long can lead to serious trouble down the road.

So, how often should you actually check your financial statements? Let’s break it down.

Why Financial Statements Matter: Your Small Business’s Vital Signs

Financial statements provide business owners with a clear picture of their business's performance. They help answer important questions like:

• Are we making money?
• Are we spending too much?
• Do we have enough cash to pay our bills?
• Are we growing?

These statements help eliminate the guesswork in business decisions. They show facts, not feelings. Many business owners rely on gut instinct, especially when they are just starting out. But gut instinct only goes so far. 

At some point, you need real numbers to back up your decisions.

There are three key financial statements every small business should understand:

• Profit and Loss Statement (P&L): This report shows income, expenses, and net profit over a set period.
• Balance Sheet: This provides a snapshot of what your business owns and owes at a specific point in time.
• Cash Flow Statement: This shows how cash is moving in and out of your business.

Together, these reports help you keep your business on track. Think of them like regular health check-ups. Just as you go to the doctor to stay ahead of problems, you should review your financials to avoid surprises.

Who Should be Involved in Financial Reviews?

Financial check-ins don’t have to be done alone. In fact, it’s better when they’re not.

As a business owner, you should be involved in the inspection process. But you should also bring in others who can help you understand what the numbers mean and how to use them effectively.

Your team might include:

• Your accountant: They can help you read your statements and offer advice.
• Your bookkeeper: They keep your records in order and may spot changes first.
• Key staff: In larger businesses, a manager or partner might be involved.

Reviewing your financials should be a team activity. With the right support, you’ll get more value out of the process and feel more confident about your decisions.

How Often Should You Check Financial Statements?

Every business is unique, but most small businesses should follow a basic check-in schedule. By building a routine, you can keep things simple and avoid problems.

Monthly Check-Ins

At least once a month, check your Profit and Loss Statement and Balance Sheet. This allows you to:

• Track sales and expenses
• Compare your performance to previous months
• Catch any mistakes or unexpected changes
• Make quick adjustments before small issues become big ones

Monthly reviews are especially important for new businesses. When you're just starting out, you don't yet have a strong feel for how your business runs. Regular check-ins help you learn what normal looks like and spot issues early.

Quarterly Check-Ins

Once a quarter, take a deeper look. This is a good time to spot trends, look for patterns, and compare your numbers to your goals. You may also want to start looking ahead at your tax situation or think about investments and savings.

Quarterly reviews can include all three financial statements. You may want to meet with your accountant or bookkeeper to discuss what’s going well and where you can improve. They can help you understand the data and answer any questions you may have.

Annual Check-Ins

At the end of each year, take a full look back. Your annual inspection is a time to:

• See how your business performed overall
• Prepare for tax filing
• Set goals for the next year
• Plan changes to pricing, staffing, or services

Your accountant should be involved in your annual check-in. They can help you understand your year-end numbers and provide guidance for your future planning.

What to Look For in Your Reviews

The numbers that matter most may depend on your industry. Still, every business should track its income, expenses, and cash flow. Over time, you’ll also want to monitor metrics specific to your type of business.

Restaurants

For restaurant owners, some of the most important numbers include:

• Food cost as a percentage of sales
• Labor cost as a percentage of sales
• Gross profit margins

These numbers are key to profitability in the food industry. If food or labor costs get too high, even a busy restaurant can lose money.

Professional Services (Dentists, Doctors, etc.)

For service-based businesses, watch for:

• Labor cost vs. revenue
• Collection of accounts receivable (outstanding invoices)
• Cash on hand

Because these businesses don’t sell physical goods, managing staffing costs and timely payments from clients is crucial.

Blue-Collar Services

For trades like electricians or auto repair shops, focus on:

• Labor and material costs
• Job profitability
• Equipment and vehicle expenses

No matter what business you’re in, the goal is the same: spend less than you earn and keep cash flowing.

Risks of Not Reviewing Financial Statements

Some business owners wait until tax time to check their financial records. Others may not look at them at all. This can lead to costly mistakes. When you skip regular check-ins, you miss the chance to fix problems early.

Here are a few common risks of not reviewing your statements:

• Overlooking cash flow issues: You might be profitable on paper, but still not have enough cash in the bank.
• Relying on incorrect data: If your books contain errors and you never check them, your decisions may be based on bad information.
• Failing to spot fraud or unusual activity: Mistakes, fraud, or theft can go unnoticed without regular reviews.
• Missing opportunities for growth: When you don’t track your numbers, it’s harder to see what’s working and where to invest.

Reviewing your financials is like checking your oil. Skipping it might save time today, but it can lead to serious and expensive problems later on.

Trust Your Gut—But Back It Up with the Numbers

Many experienced business owners develop a strong sense of what’s happening in their company. After years of running the day-to-day, they can often sense when something feels off—sales seem slower, costs feel higher, or cash seems tighter.

This instinct is a powerful tool. But even the best gut feeling benefits from backup. Financial statements help confirm what you already suspect, or they may show that things aren’t as bad (or as good) as they feel.

For example, you might feel like the business had a rough month, but your financials could show stronger-than-expected profit due to a few large orders or reduced costs. Or you may sense that expenses are rising, and the data can help pinpoint where and why that’s happening.

Checking your numbers gives you that extra layer of certainty. It strengthens your decisions and helps you take action with confidence.

Easy Action Steps to Get Started

If you haven’t been checking your financials regularly, now is a great time to start. Here’s a simple checklist:

• Set a recurring time each month to inspect your financials
• Review the Profit & Loss and Balance Sheet
• Ask your accountant to explain anything you don’t understand
• Check key metrics for your industry
• Track your progress toward monthly or quarterly goals
• Use the numbers to guide changes to pricing, expenses, or staffing

You don’t have to be perfect. You just have to be consistent. Over time, you’ll build knowledge and confidence, and your business will benefit from it.

Need Help? We’ve Got You Covered

Reviewing your financial statements doesn’t have to be complicated, and it definitely shouldn’t be ignored. Whether you’re just getting started or have been running your business for years, establishing a habit of regularly checking your numbers provides clarity, control, and confidence.

Think of it this way: a little time each month reviewing your financials is like routine maintenance on your most valuable asset, your business. And just like regular tune-ups help your car run smoother, regular financial reviews help your business stay strong and headed in the right direction.

Need help getting started? You don’t have to do it alone. At TMA Accounting, we help small business owners make sense of their financials. We don’t just file taxes or manage payroll—we help you understand your numbers so you can lead your business with clarity and confidence.

Whether you’re just getting started or want help building better habits, we’re here to help.

Schedule a call with us today. Let’s simplify your financials and help your business grow—one statement at a time.