Know where the money stands, and how you know

Every owner carries a few numbers in their head: last month's revenue, what is in the bank, what payroll costs. The trouble starts when those numbers come from different places at different times. The bank balance is from this morning, revenue is from a report someone ran last week, and the cost figure is a remembered estimate. Each one is roughly right. Together they can point you toward the wrong decision.

Knowing where the money stands is two questions, not one: what the figure is, and where it came from.

Start with four figures

For a monthly view, four figures are a good start:

• Revenue: what the business earned in the month.
• Costs: what it took to earn it.
• The surplus or the shortfall: the difference between the two.
• Cash: what you can actually spend today.

Revenue and cash are not the same thing, and a month can look strong on one and tight on the other. An invoice sent is revenue. An invoice paid is cash.

That gap is where many owners feel the strain. In the Federal Reserve's 2024 survey of small employer firms, 51% named uneven cash flow as a financial challenge, a measure that includes collecting on receivables, and 56% named paying operating expenses. And a JPMorgan Chase Institute study of 597,000 small businesses found that the median one held enough cash to cover 27 days with no money coming in. Knowing your own cash, and when it will move, is how a tight month stays a tight month instead of becoming a crisis.

Know where each figure came from

For each figure, you should be able to say where it came from: read from your accounting software, imported from a spreadsheet, or typed in by hand. All three are fine. What matters is knowing which, because it tells you how current the figure is and who to ask about it.

A figure read from your books is as current as your books. A figure typed in by hand is as current as the day someone typed it. A retainer someone added by hand is perfectly useful, as long as you know it was added by hand.

Open the figure to its records

A total is a summary of records: invoices, bills, payments and entries. When a figure surprises you, open it. The records behind a revenue figure tell you more than the total does: which customers, which months, and whether one large item is doing most of the work.

Where the records end, say so

Sometimes part of a figure has no record behind it: an estimate, a correction, an amount still to be entered. That is normal. The useful habit is to see it rather than lose it, so you know how much of a number you can trace and how much rests on judgment.

What you learn from it

Tracing your figures for a few months teaches you how the money actually moves through the business: where it comes in, where it waits, and where it goes. It also shows you which numbers you rely on that nobody has written down. That understanding is what makes a conversation with a lender, a partner or your accountant shorter and better.

Where Standing Proof helps

In the workspace, every figure says where it came from, whether typed in, imported, or read from QuickBooks Online, and opens to the records behind it. The Inspector shows how much of each figure has a record behind it, so you can see at a glance what rests on records and what rests on judgment.

Standing Proof shows exactly where each figure came from. It does not check that a figure is true: keeping the books accurate stays with you and your accountant. What it gives you is the trail, so when someone asks about a number, you can show them what it rests on.

EPS's financial work is advisory. Your accountant keeps the books and the taxes, and we help you use the numbers to decide.

Sources

• Federal Reserve Banks (2025). 2025 Report on Employer Firms: Findings from the 2024 Small Business Credit Survey.
• JPMorgan Chase Institute (2016). Cash is King: Flows, Balances, and Buffer Days. Evidence from 600,000 Small Businesses.