Are you running a profit and loss report (aka an income statement) for your business every month?
If not, you should be!
WHAT IS THE PROFIT AND LOSS REPORT?
This report gives you a very handy recap of your income and your expenses. And of course, the difference between the two (and this is where we cross our fingers that there is more income than expenses!).
The profit and loss report quickly summarizes the various transactions that you have entered throughout the day, week, month, etc. (i.e. invoices, checks, etc.)
THE PROFIT AND LOSS REPORT IN QUICKBOOKS
Click Reports (in the menu bar) > Company and Financial > Profit and Loss Standard. From there, you'll see the report for the current month-to-date as shown in the sample below (click the image for a larger view):
This report helps you quickly see how your expenses stack up against your income. From there, you can develop plans to either increase your income and/or reduce your expenses in the weeks or months ahead.
Don't run this report only at tax time. Better - run it at the end of every month so there are no surprises. It will help you know exactly what is going on.