Profit First Chat: How to Audit Your Books Internally (CFO’s Checklist for Readiness) | Solocast E15

If you can’t audit your own books, you can’t trust your numbers—and that’s a dangerous place to run a business from. In this episode, I walk you through a simple, practical way to internally audit your financials so you can actually understand what’s happening inside your business.

We break down the three core financial statements—profit and loss, balance sheet, and cash flow—and what you should be looking for in each one as a business owner. This isn’t about becoming an accountant. It’s about knowing enough to spot red flags, ask better questions, and make confident decisions with your money.

Timeline Highlights

[0:00] Why not being able to audit your books creates risk in your business

[1:03] Your numbers are the story of your business—and your path to freedom

[1:35] The three financial statements every owner must understand

[2:16] Profit & Loss: income minus expenses and what to verify

[2:57] Comparing projected revenue vs actual performance

[3:36] Breaking down revenue streams for better clarity

[4:15] Spotting unusual or inconsistent expenses

[4:57] Red flags: “miscellaneous,” “ask my accountant,” and unknown categories

[5:34] Balance Sheet basics: assets, liabilities, and equity

[6:13] Why negative assets or liabilities are major warning signs

[7:30] When your business is upside down (liabilities > assets)

[8:26] Cash Flow Statement: tracking real cash movement

[9:18] The key question: do you have more cash this month or not?

[9:42] Identifying whether cash is from profit or borrowed money

[10:19] Why business owners must review their numbers regularly

Key Takeaways

1. If you can’t audit your books, you can’t trust your financial data.
2. The profit and loss shows performance—but not actual cash.
3. The balance sheet reveals long-term financial health and risk.
4. The cash flow statement shows whether your business is gaining or losing cash.
5. “Miscellaneous” or unclear accounts are major red flags.
6. Negative assets or liabilities signal potential bookkeeping errors.
7. Financial clarity starts with understanding—not outsourcing blindly.

Links & Resources

Book a free discovery call and get clarity on your numbers: profitrei.com

Closing

Thanks for spending time with me today. If this episode helped you better understand how to audit your books and spot red flags, make sure to follow the show, leave a review, and share it with another business owner who needs more clarity around their numbers. And if you’re ready to stop guessing and start leading your business with confidence, visit profitrei.com and book your free discovery call to start building real financial clarity and freedom.