A Monthly Three-Report Check for Family Propane Dealers Before Tax Season

The Situation

Look past the heating-season P&L Your heating-season P&L can look healthy while service work waits to be billed. This month, put the balance sheet, income statement and cash-flow statement side by side before tax season. Check what is owed and what has been collected. A summer cash squeeze can be hard to see in the income statement alone.

The Facts

Use the sources together Harvard Business School Online says to read the three reports together: assets, debts and owners' equity at a given date; revenue and expenses over a period; cash in and out. SBA calls the balance sheet the foundation for managing business finances. Its finance guide is another source for managing the books.

ATB Financial's Small Business Pulse Check covers financial, strategic and operational questions. It suggests a monthly check between annual meetings with a CPA or advisor, including receivables, payables and cash on hand.

Business Impact

Trace the cash from the route Start with last month's three reports for the same period. One completed autofill ticket is a place to begin: match it to its invoice, then the payment. Any open balance belongs in the receivables review.

Tank rentals need a look, too. Compare billing with each agreed discount. Keep service calls waiting for an invoice apart from bills waiting to be paid; route unbilled or uncollected items to the person who handles invoicing before month's end.

Key Takeaways

• Our read: a strong heating-season P&L can mask an off-season cash squeeze, so track unbilled service tickets and discounted tank rentals each month.
• Ask your CPA or bookkeeper what monthly cash-on-hand benchmark fits your seasonal swings before the next annual meeting.

Competitive Advantage

Your office can bring its knowledge of each account to the bookkeeper's review. Each billing question needs someone to handle it after the meeting.