How to track your company’s financial health month to month
Strong businesses run on visibility. When you can see exactly how your company’s performing each month, you can make better informed decisions, faster, and keep your business performing at its best.
The challenge of tracking is figuring out how to do it in a way that’s simple, consistent and actually useful. It starts with understanding what to measure, reviewing it regularly and using those insights to drive your business forward.
What is financial health in a business?
Financial health shows how well your business is performing, how stable it is and how sustainable its growth will be. It’s the full picture of how your income, cash flow and assets work together to fund your goals.
Healthy businesses generate steady profits, keep enough cash to cover day-to-day needs and build reserves for what’s next. Think of it as keeping balance between three key areas:
Profitability: How efficiently your business turns income into profit
Liquidity: How easily you can cover your outgoings as they fall due
Stability: How solid your base is for long-term growth and resilience
When you’re tracking these areas month by month, you can make decisions based on facts, not just gut feel. It helps you plan with confidence, knowing whether the business can support the next hire, investment or dividend.
The key reports that keep your business on track
The best way to monitor your company’s financial health is to use the same set of reports every month. They’ll give you a clear view of what’s happening and where to focus next.
Profit and loss statement (P&L): Shows your income and expenses for the period, helping you track profitability and spot areas where costs are rising.
Balance sheet: Summarises what the business owns, owes and is owed — the clearest snapshot of your overall stability.
Cash-flow report: Tracks how money moves in and out, showing when cash might tighten or when there’s room to reinvest.
Key performance indicators (KPIs): Highlight the numbers that matter most to your goals, like project profitability, recurring income or cost per client.
These reports make up your management accounts: monthly updates that bring profits, cash flow, assets and liabilities into one place. Management accounts give you real-time visibility of what’s going on inside your business, so you can make confident, data-driven decisions before problems arise.
How to build a monthly review routine
The best financial decisions come from collaboration. Working closely with your accountant each month turns raw numbers into practical insight. This partnership is what keeps your business moving forward.
A simple, consistent routine helps make that happen:
Start with your accountant
Begin each month by reviewing your management accounts together. Your accountant can highlight trends, spot opportunities and make sure your data tells the full story.
Use live data
Cloud platforms like Xero or QuickBooks keep everything up to date automatically. With live bank feeds and reconciliations, you both have accurate figures to work from.
Focus on the right metrics
Choose KPIs that reflect your goals. For example, service-based firms might look at project profitability, recurring income or utilisation rate.
Spot changes early
Review your results together and look for trends across several months, such as small shifts in margins, rising costs or slower payments. Early insight makes quick action possible.
Plan the next steps
Turn what you’ve learned into clear actions for the month ahead. Whether that’s tightening cash flow, improving efficiency or adjusting pricing, your accountant can help you make those changes confidently.
What to look for in your results
Your numbers tell a story every month. Some signals show that things are on track, while others highlight areas that need attention. Understanding both helps you make confident, well-timed decisions.
Positive signs of financial health
These signs show that your business is generating profit, building resilience and maintaining the flexibility to grow:
Consistent profitability and stable margins
Positive operating cash flow
Manageable debt levels
A healthy buffer of working capital
Steady, sustainable revenue growth
Warning signs to act on early
When you review your figures regularly, you’ll spot these shifts early enough to respond and stay in control. Certain patterns in your reports can indicate pressure ahead. Keep an eye on:
Cash reserves falling for several months
Profit margins tightening while turnover stays level
Overheads rising faster than income
Clients taking longer to pay
VAT or tax bills becoming harder to manage
How monthly tracking connects to your bigger goals
Financial health builds over time through attention and consistency. When you track your company’s performance month by month, you’ll always know where you stand, what’s changing and where the next opportunity is.
When you understand your numbers each month, you can make better decisions about drawings, investments and long-term wealth. It gives you clarity over what you can take out, what you should reinvest and how to make progress towards the lifestyle and retirement you want.
If you’d like help setting up a clear monthly review process or building management accounts that actually help you make decisions, get in touch. We’ll help you create a system that keeps your business performing at its best.