Is Your Business Profitable?
Is your business profitable? This may seem like a simple question, but the answer is not always very easy to understand. A business will bring in revenue, but it will also have expenses. If total revenue less total expenses is a positive number, then your company is profitable.
To calculate total revenue and total expenses, though, it’s imperative that you properly track all of your business transactions. We recommend adopting a cloud-based accounting system that syncs with your business bank. We have found Xero to be the most reliable cloud accounting solution. Once you have your accounting system set up, make sure that you are bookkeeping on a very regular basis, and reviewing your financials on a monthly basis to identify key performance indicators in your business. Questions? Feel free to reach out to us!