Gauge the Health of Your Bookkeeping with a 5-Question Test

Let’s dive into a quick but insightful exercise.

Grab your favorite pen.
Take a deep breath.
Evaluate your bookkeeping skills by tackling just five straightforward questions.

Just five.
That’s all it takes.

Even if you believe your bookkeeping is solid, keep reading — you might discover some surprises about your business's financial health.

This simple test can uncover significant issues lurking beneath the surface — whether it’s cash flow hitches, pricing discrepancies, overlooked tax breaks, or growth hurdles — the hidden elements that can be costly if left unchecked.

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Ready to get started? Let’s go.

Understanding Your Score

Rate yourself 0–5 points for each question.

  • 0 = Not at all

  • 5 = Absolutely, every month without fail

Your total score ranges from 0–25 points.

No judgments — just a pathway to clarity.

Question 1: Are Your Books Accurately Closed Each Month?

Think of your monthly close as essential business hygiene.
Skipping it once might be okay.
Skipping it twice means relying on intuition rather than facts.

A diligent monthly close-up results in:

  • Pristine financial statements

  • Dependable reports

  • No room for guessing

  • Awareness of issues before they escalate

If tidying up your books is frequently delayed — or bookkeeping feels like a thriller novel — score on the lower end here.

Score yourself: 0–5.

Question 2: Do You Know Your Gross Profit Margin?

Your revenue covers expenses, but it’s your gross profit margin that rewards you.

Unfamiliarity with your margin is akin to selling with blinders on. Absent this knowledge, pricing, staffing, and process optimizations will remain elusive.

Successful businesses not only understand their margins but also know how to enhance them.

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Score yourself: 0–5.

Question 3: Do You Know Your Breakeven Point and Days of Cash on Hand?

This is the litmus test.
This is the peace of mind you need.
This separates a restful night from a sleepless one.

If you’re unsure:

  • The sales needed to break even

  • The number of days with cash reserves for survival

  • Whether a slow month or unexpected cost is manageable

Talk to Jim
For a 30-minute conversation about your business, talk to Jim.
Talk to Jim

Your score may be alarming.

Score yourself: 0–5.

Question 4: Does Your Financial Reporting Highlight Trends and KPIs?

Basic expense reports? Useful.
Comprehensive reports showcasing patterns, trends, and insights into business operations? Game-changers.

Trends reveal patterns.
KPIs reveal health.
Together, they put you in the driver’s seat.

If reports only state "here’s what occurred," without "here's its significance," give yourself an honest score.

Score yourself: 0–5.

Question 5: Is There a Budget or Cashflow Forecast in Place?

Forecasting converts financial reviews from looks in the past to a navigational tool.

Budgets command your money’s destination.
Cashflow forecasts inform if you’ll have enough resources.

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Without these, you're on the defensive — stressful, unpredictable, and costly.

Score yourself: 0–5.

Your Total Score: The Implications

0–10 points: Financial Firefighting

You’re managing, but it’s more challenging than necessary.
You’re reactionary, unused to planning, and possibly near significant strain from a bad month.

The Bright Side: Significant improvements often arise swiftly at this stage.

11–17 points: Stable, yet Reactive

You’re safe but possibly overlooking untapped potentials.
Margins, cash flow, and reporting could be firmer.

Businesses in this range feel "okay" until they recognize the possibilities for enhancement.

18–22 points: Healthy, with Opportunities

Strong fundamentals.
Sound structure.
Some tweaks can unlock improved profitability and smoother operations.

This is where growth shifts from chance to intention.

23–25 points: CFO-Level Precision

Your business runs like a well-oiled machine.

Hitting this level is commendable, but remember: perseverance leads to scalability.

Want to Boost Your Score? Lighthammer Bookkeeping is Here.

Most entrepreneurs don’t need more data — they need clearer insights.
Streamlined systems.
Effective routines.
A financial partner to demystify these figures.

If refining your bookkeeping, enhancing reporting, developing forecasts, or designing a truthful dashboard is your goal, contact us at Lighthammer Bookkeeping. “Where you get CPA-quality at bookkeeping rates.”

Your books should fuel your growth — not lead to uncertainty. Let’s ensure they work in your favor.

Talk to Jim
For a 30-minute conversation about your business, talk to Jim.
Talk to Jim
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