---
title: "Are You Doing Monthly P&L and Balance Sheets?"
section: "Operational Excellence"
sectionId: "operational-excellence"
date: "2026-05"
---

## The Two Core Financial Documents

Every founder needs to understand two fundamental financial statements and the difference between them.

### Balance Sheet

Reports your company's **assets, liabilities, and shareholder equity at a specific point in time**. Think of it as a snapshot of what you own, what you owe, and what's left over.

### P&L (Profit & Loss Statement)

Summarises your company's **revenues, costs, and expenses over a specific period of time**. It shows whether the business is making or losing money.

Together, the P&L and balance sheet give you an instant snapshot of your business.

## How Often to Review

- **Minimum:** quarterly
- **Recommended:** monthly — especially at the early stage when things move fast and surprises can be fatal

Always have both documents to hand when speaking with investors.

## Practical Tips

- Search for "P&L template" or "balance sheet template" online — there are many good free options
- It is fine to outsource this work to an accountant or bookkeeper, but **you must review it yourself at least monthly**
- Check their work diligently — do not assume it is correct because someone else produced it

## Why This Matters for Founders

As a founder, understanding your P&L and balance sheet allows you to:

- **Spot problems early** — a bad month is manageable; a bad quarter you didn't see coming is dangerous
- **Model future scenarios** — whether the business is growing or contracting, you need to be able to forecast what happens next
- **Have confident investor conversations** — investors will ask; founders who can't answer lose credibility fast