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Monthly Financial Statements and Reconciliation
Prepared and reconciled monthly financial statements for an interiors firm. I checked account discrepancies, found errors, and shortened resolution times, while keeping supporting documents complete. Working with the finance team, I helped improve process efficiency by 15%.
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Episode #6: The bank balance is NOT your profit.
“I have AED 250,000 in the bank, so I’m doing great.”
Not necessarily. Look at what’s actually inside that balance:
🟣 AED 100,000 is a bank loan. You have to pay it back.
🟡 AED 60,000 is customer advances. You haven’t delivered the work yet.
🔵 AED 15,000 is VAT collected. It belongs to the tax authority.
🔵 AED 45,000 is your own capital that you put in.
🟢 AED 30,000 is the actual profit.
Cash and profit are different things, for three reasons:
1️⃣ Timing. An invoice you’ve sent is profit, but it isn’t cash until the customer pays.
2️⃣ Non-cash costs. Depreciation lowers your profit, but no money leaves the bank.
3️⃣ Not your money. Loans, advances, VAT and capital all add to your balance without adding to your profit.
Profit = Revenue earned − Expenses incurred.
Earned ≠ received. Incurred ≠ paid.
Before you spend, ask:
✅ Did customers pay me, or did I only invoice them?
✅ Is any of this a loan, advance, VAT or my own capital?
✅ Which bills and taxes are still due?
✅ What is my real profit this month?
If you can’t answer these, your bank balance is giving you a false picture of how the business is doing.
Next up: Episode 7. Follow along so you don’t miss it.
Counting Crux |
#Accounting #UAEBusiness #Profit #CashFlow #Bookkeeping #Founders #DubaiBusiness #SmallBusiness
Cash flow and profitability are two different things. Understanding where your money comes from and where it needs to go is essential for making smarter business decisions.
I was talking to a prospective client for my bookkeeping business.
She asked what are the key benefits of hiring a bookkeeper. I was semi-prepared with an answer:
1. Saves Time - frees you from daily data entry, reconciliations, and invoice tracking so you can focus on growing your business.
2. Financial Accuracy - prevents calculation errors, misclassified expenses, and messy records that lead to lost tax deductions.
3. Better Cash Flow Management - tracks incoming and outgoing money to help you spot shortfalls early and pay bills on time.
4. Smoother Tax Preparation - keeps year-round records organized, making tax season faster and reducing audit risks.
5. Clearer Strategic Insights - generates clean financial reports (like P&L and balance sheets) that inform budgeting and hiring decisions.
6. Cost-Effective Scaling - outsourcing or hiring a part-time bookkeeper is often more affordable than maintaining a full-time in-house accounting department.
Wondering what I missed? What else do you tell your clients when they ask this question?
I’d add peace of mind! 😊 Business owners shouldn’t have to guess whether they can afford their next hire or investment. Good bookkeeping helps them make those decisions with confidence, not just keep track of what’s already happened.
There's a sentence I hear from experts more than almost any other.
"I've hired help before. It didn't move anything."
It shows up in different words from different people. A VA who did the tasks. A designer who made the pages look great. A strategist who handed over a plan and moved on.
Usually everyone did what they were asked. That's the frustrating part.
What was missing was someone looking at how the pieces connect. So the tasks got done, the pages got prettier, the plan sat in a folder, and the founder was still the one holding it all together.
If that's you, there's nothing wrong with you, and nothing wrong with wanting help again. You were handed pieces when what you needed was a system built around how your business actually works.
That's the gap I care most about closing.
This is such a real frustration. The line about everyone doing what they were asked being the frustrating part nails it. Pieces versus systems is the difference between busy and moving. Do you find most clients come to you already knowing this, or is part of the work helping them see the gap?