Review total revenue vs. last month and same month last year
Is revenue trending up, down, or flat? Do you know why?
Calculate gross profit margin
Gross Profit ÷ Revenue × 100. Is it above your target? Has it changed from last month?
Review net profit margin
Net Profit ÷ Revenue × 100. Target: 10–20% for a healthy service business.
Check each major expense category for anomalies
Flag any line item that is more than 10% over budget or significantly different from last month.
Confirm payroll as % of revenue is within target
Total payroll (incl. owner compensation) should generally stay below 50% of revenue.
Check current cash balance and compare to 90-day average
Is cash higher or lower than usual? Do you know the reason?
Calculate current ratio
Current Assets ÷ Current Liabilities. If below 1.0, flag immediately for review.
Review total liabilities trend
Are liabilities growing, shrinking, or stable? Is new debt being taken on intentionally?
Confirm all bank accounts are reconciled
Every bank and credit card account should match the books exactly. No unreconciled items over 30 days.
Review total outstanding AR balance
Is it growing relative to revenue? A growing AR balance means slower collections.
Identify all invoices 31–60 days past due
Send a follow-up for each. Note any that need escalation.
Identify all invoices 60+ days past due
Each needs a plan: payment arrangement, final notice, or write-off decision.
Note any single client with over 30% of total AR
High concentration in one client is a cash flow risk. Flag for monitoring.
Review operating cash flow for the month
Positive operating cash flow = business is generating cash from its core operations. Negative needs investigation.
Identify any large cash outflows in the next 30–90 days
Tax payments, payroll cycles, loan repayments, equipment purchases, rent renewals.
Confirm sufficient cash runway for the next 60 days
Can you cover all expected expenses for the next two months without new revenue? If no, escalate.
Compare actuals to budget for the month
Note all variances over 10%. Determine if each is explainable (one-time) or structural (recurring).
Review year-to-date budget performance
Are you ahead or behind on revenue YTD? What does that mean for full-year projections?
Identify one financial decision this data is informing
Hiring, pricing, cutting a cost, collecting an overdue invoice. Every review should produce at least one action.
Schedule next month’s review now
Block 45 minutes in your calendar before you close this checklist.