I get it – when it comes to monthly financial analysis for startups, most founders would rather be doing literally anything else. But here’s the thing: staying on top of your numbers doesn’t have to be a headache. In fact, with the right financial management for SMEs tools, it can be one of the most empowering things you do for your business.
As a financial manager at Fuel, I do this every month for a lot of founders and small businesses.
And if you’re thinking, “I’d rather have someone else do this,” don’t worry. We’ve got plans with fractional CFO services who can handle it for you. But if you’re in full “founder mode” and want to dive in yourself, this guide is your playbook.
Let me walk you through how I handle monthly financials, step by step.
Before we dive in, it’s important to note that Fuel’s customizable financial dashboard is fully adjustable to fit your business model, challenges, and goals. While we'll go over a basic dashboard setup here, yours will be tailored to fit your unique needs as an SME or startup founder.
The flow of financial analysis can vary based on what’s most important for your business. For instance, if your primary focus is revenue growth, we start with Sales & Marketing ROI Tracking, followed by Revenue vs. Churn Analysis, and then move on to Cash Flow and Net Profit.
Every business is different, and your financial review should reflect that.
The Profit and Loss (P&L) analysis is where I always start. It’s like a snapshot of your financial efficiency. This graph breaks down exactly where your net revenue is coming from and what’s eating into it — COGS, expenses, taxes, you name it.
If I see negative earnings after expenses, I know we’ve got a red flag. That’s when I dig into the details, using Fuel’s FP&A solution for SMEs to catch issues early.
I always check cash balances, inflows, outflows, runway, and burn rate. If something’s off – say, the runway is shorter than expected – it’s time to compare planned vs. actual spending and see where things went sideways.
Tip: Always know your runway. This is how long your business can survive without any new cash inflows. If the number is shrinking, cut unnecessary expenses quickly. I always recommend having a buffer of at least 12-24 months' runway.
If you’re running a service-based business, accounts receivable (AR) is your bread and butter. I always make sure to check who owes money, what percentage of revenue is tied up in unpaid invoices, and who the top debtors are.
AR can be a silent killer. If your clients are slow to pay, your cash flow can dry up fast. That’s why I always make sure we’re tracking AR closely and following up on any overdue invoices.
We even have a cheat sheet for managing accounts receivable because, let’s be honest, no one likes chasing down payments.
Now, let’s talk about sales and marketing. I’m a big believer in tracking planned vs. actual performance when it comes to leads, conversion rates, and channel effectiveness.
For example, if the plan was to generate 300 leads and we only pulled in 200, I dig into which channels underperformed. On the other side, if we crushed our targets, we might decide to ramp up that winning strategy for next month.
Founders love this part of the dashboard. It’s not just about reviewing what happened – it’s about using those insights to adjust your strategy for the next month.
Tip: Always analyze conversion rates by channel. Sometimes, the channel with the highest number of leads isn’t the one delivering the best conversions. Double down on high-converting channels, and if a channel underperforms consistently, consider reallocating budget elsewhere.
Next, I look at revenue. Did we hit our target? Did churn eat into growth? If your churn rate is higher than expected, it’s time to figure out why customers are leaving and fix it before it hurts your revenue further.
What I look for: I’m always checking if the revenue matches the plan. If churn is high, I dive deeper into what’s driving customers away. This is where we put out fires before they start spreading.
Lastly, I check net profit and profit margin. These are your big indicators of how efficiently your business is running. If margins are shrinking, I know something’s not right. If they’re growing, I keep a close eye on what’s working so we can double down.
The key here: Each month, I ask, “What’s driving these changes?” It could be rising expenses, underpricing, or even something operational. Whatever it is, this is the time to figure it out and act.
At the heart of every analysis is a simple routine: Plan vs. Actual. You planned for X, but reality gave you Y. Now, it’s time to adjust and plan for next month. This isn’t just a financial review – it’s an opportunity to make smarter decisions and keep the business moving forward.
Fuel’s dashboard isn’t just about tracking numbers – it’s about taking control. It’s fully customizable to your business, whether you’re flying solo or working with a fractional CFO. This customizable financial dashboard helps you stay on top of your finances, understand the bigger picture, and make smarter decisions for the future.
So, when you dive into your next monthly financial analysis, don’t sweat it. You’ve got the tools, the insights, and the process to take control and grow your business. Book Fuel's demo if you feel like it can we a right match.
And may the profit be with you 💚
Monthly financial analysis can be simplified by using structured tools like Fuel’s customizable financial dashboard. For startups and SMBs, the process typically starts with tracking Profit & Loss (P&L), moving to cash flow, accounts receivable, and then reviewing sales, marketing, revenue, and churn metrics to provide a comprehensive view of financial health.
Fuel’s financial management solution for SMBs is designed specifically to simplify financial management. It consolidates essential metrics like cash flow, accounts receivable, and net profit in a fully customizable format, allowing SMB founders to focus on growth through data-driven insights.
Sales and marketing ROI tracking provides insights into lead generation, conversion rates, and channel effectiveness. Fuel’s dashboard enables founders to track planned vs. actual results, helping them identify high-converting channels and optimize marketing spend.
