The #1 Mistake Small Business Owners Make with Their Books (and How to Fix It)
When I ask small business owners what their biggest bookkeeping struggle is, I usually hear things like:
“I keep losing receipts.”
“I never know how to categorize things.”
“I’m always behind.”
But here’s the truth: the biggest mistake isn’t about receipts, categories, or deadlines.
It’s about flying blind.
Why Running Blind Hurts Your Business
When you don’t regularly review your financials, you’re essentially driving without a dashboard. Sure, you might keep moving forward, but you won’t see when the gas is running low or when the engine light is on.
Here’s what happens when owners skip monthly reviews:
Missed opportunities. You don’t see what products or services are most profitable.
Cash surprises. Revenue might look great on paper, but your bank account tells a different story.
Reactive decisions. Instead of planning ahead, you scramble when tax season rolls around or when a big expense hits.
What a Monthly Review Really Gives You
Taking an hour once a month to review your books pays off in big ways. You’ll gain:
Clarity: You’ll know exactly where your money is going.
Confidence: Decisions about hiring, pricing, or investing become less stressful.
Control: You’ll spot issues before they become real problems.
The three reports every owner should check monthly are:
Profit & Loss Statement (P&L) – Are you actually making money?
Cash Flow Report – Do you have enough to cover what’s coming up?
Balance Sheet – What’s your overall financial health?
How to Get Started
If you’ve been avoiding your books, here’s a simple starting point:
Pick one day each month (like the 5th).
Log in to QuickBooks (or your system of choice).
Reconcile your bank accounts.
Review the three reports listed above.
Jot down one or two insights or action items.
That’s it. Keep it simple — consistency matters more than perfection.
Final Thought
Bookkeeping isn’t just about compliance. It’s about clarity and confidence in running your business.
So, ask yourself this: Are you reviewing your books often enough to make informed decisions? Or are you still running blind?
Need help setting up a simple monthly review process? That’s what I do at LedgerWise. Let’s talk about how to make your financials work for you.