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What Your Books Should Be Telling You
Twelve questions every owner should be able to answer from their own records. This is not about whether your accounts are correct. It is about whether they are any use to you while there is still time to act.
How to use this
You will need: two minutes and nothing else. There is nothing to look up and no figures to enter. Every question is about what you could find out if you wanted to, and how quickly.
- Answer for how things actually workNot how they are supposed to work, and not how they will work once the new system is in. If the answer exists somewhere in principle but nobody has ever produced it, that is a No.
- Yes, today means todayYou could have the answer in front of you this afternoon without anyone building anything. If your accountant would need to go and prepare it, that is not today.
- Takes days is the most common honest answerThe information exists in Tally or in your files, but somebody has to go and dig it out, and by the time they have, the moment for the decision has usually passed. This is a real answer, not a soft No.
- Answer all twelveThey cover four areas: profit, cash, what is owed in both directions, and the forward-looking questions. You will not get a result until all twelve are answered.
- Press Show my blind spotsYou get your reporting level, a bar for each of the four areas, and a list of the decisions you are currently taking without the information you need.
This is not a compliance check. A business can be perfectly compliant and still unable to answer a single one of these. If it is compliance you want to test, use the Compliance Health Score instead — the two questions are separate and both are worth asking.
Twelve questions
Answer for how things actually work today, not how they are meant to work. Nothing leaves your browser.
Profit
Do you know what profit you made last month?
Do you know your gross margin by product line, brand or principal — not just overall?
Do you know which of your customers are profitable after discounts, schemes and freight?
Cash
Do you know roughly how much cash you will have at the end of next month?
Do you know how much of your money is currently sitting in stock?
Do you know what your overdraft actually cost you in interest last month?
Owed both ways
Do you know who owes you money, and for how long it has been outstanding?
Do you know what you owe your suppliers and when each amount falls due?
Do you know which customers have quietly gone past their credit limit or credit period?
Decisions
Could you say whether last month was better or worse than the same month last year, and explain why?
Do you know which expenses have grown faster than your sales over the last year?
If a supplier offered two per cent off for paying thirty days early, could you tell whether it is worth taking?
What your results mean
- Your reporting level
- Four levels, from Blind to Live. Blind means the books exist to satisfy filings and tell you nothing while there is still time to act. Historic means the answers can be found, but only after the period has closed. Current means you know where you stood last month, soon enough to steer with. Live means you know where you stand now rather than where you stood.
- Answerable today
- How many of the twelve you could answer this afternoon without anyone preparing anything. This is the number that matters most, because information that arrives after the decision has been taken is a record rather than a report.
- Answerable, but slowly
- Questions where the data exists but has to be assembled. These are usually the cheapest to fix, because the raw material is already there and what is missing is the routine that surfaces it every month without being asked.
- Blind spots
- Questions you cannot answer at all. Each one appears in the list below your results with the decision it is quietly affecting. These are worth reading even if you disagree with the level you were given.
- The four area bars
- How much each area can tell you, as a percentage. Uneven bars are normal and informative: many businesses know their profit well and their cash badly, or track receivables closely while never looking at what they owe. The lowest bar is where the next improvement is worth most.
- What moves you up a level
- Your result names how many answers would have to change from no to yes to reach the next level. It is usually fewer than people expect, because the same monthly routine tends to answer several of these questions at once.
This calculator gives an indicative estimate based only on the figures you enter. It is not professional advice and must not be relied upon for a filing, a loan application or any statutory position. All calculations run inside your browser and are never sent to Krishwealth Trades unless you choose to download a report.
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