One of a CEO’s most important tasks is staying on top of the company’s numbers. This isn’t just something for accountants. Financial statements give insight into the health of all areas of the company as well as how it’s achieving its goals. Here’s what you should be reviewing each month.

Strategy Objectives

The first step is tracking how the company is following its near and long-term strategy. Everything a company does should have a purpose, and data is meaningless if it doesn’t fit into the story of how a company is meeting its goals.

These are the key strategy review points:

Income Statement

The goal of every company is to make a profit, so the bottom line of the income statement is one of its most important measures. Of course, taking on additional expenses now could potentially lead to greater profits in the future. You need to understand both your net profit and why it is what it is. Here are the questions to ask:

Balance Sheet

The income statement reports results, but the balance sheet can be a better predictor of the future. A healthy balance sheet can give flexibility and open up opportunities for growth, while an unhealthy balance sheet may force the company to slow long-term growth to survive in the future. There are several areas to consider.

Accounts Receivable

Accounts Payable

Accrued Liabilities or Expenses

Working Capital

Statement of Cash Flows

Virtually every business needs cash to operate. If you’re on track for millions of dollars in profit but can’t pay your suppliers or make your rent, you could be out of business. Taking on debt isn’t always an option, and balance sheet assets may not be convertible to cash in time.

Consider these areas:

Accounting Processes

The key to being able to answer these questions is having the information you need. Accounting isn’t just something that you do at the end of the year to prepare your financial statements or tax return. It’s an ongoing process that allows you to have information at your fingertips when you need it.

Your accounting processes should capture information as it happens. This means automating the recording of things like sales, receivables, payables, and inventory. It also means integrating your different data systems so that you can quickly pull all your information together rather than waiting for different departments to run separate reports.