If you’re a business owner in Charlotte or Lake Norman, chances are you’ve been handed a set of financial reports and thought, “What am I looking at?”

You’re not alone. Understanding your profit & loss (P&L) statement, balance sheet, and cash flow report is critical—but most Charlotte entrepreneurs were never taught how to read them.

At Polaris Tax & Accounting, we prepare monthly financials for clients across Charlotte and walk them through what the numbers mean—and more importantly, what to do with them.

The Profit & Loss (P&L) Statement

Also known as your income statement, this report shows whether your business is making money over a specific period (usually monthly, quarterly, or yearly).

Key Sections:

  • Revenue: Total income from sales or services
  • Cost of Goods Sold (COGS): Direct costs to deliver your product/service
  • Gross Profit: Revenue minus COGS
  • Operating Expenses: Rent, payroll, software, marketing, etc.
  • Net Profit (or Loss): The bottom line

What to Watch:

  • Is your gross profit margin healthy for your industry?
  • Are expenses rising faster than revenue?
  • Are there non-operational items (like one-time costs) skewing results?

Charlotte-based S Corps, consultants, and contractors often miss red flags because they only check net income—when gross margin or expense creep is where the real story lies.

The Balance Sheet

Your balance sheet shows a snapshot of your company’s financial position at a specific date.

Key Sections:

  • Assets: What your business owns (cash, receivables, equipment)
  • Liabilities: What your business owes (credit cards, loans, taxes payable)
  • Equity: What’s left over for the owner (retained earnings, contributions)

What to Watch:

  • Cash reserves – Do you have 2–3 months of runway?
  • Debt levels – Is your business over-leveraged?
  • Accounts receivable – Are customers paying on time?

Pro tip: Your bank balance, most Assets and Liability accounts should never have a negative balance. If they are, your prior bookkeeper might have been redefining the laws of accounting and those accounts might need to be completely reconciled again. Yes, we’ve seen it. No, it wasn’t a theoretical case study.

We show Charlotte clients how to use their balance sheet to improve loan applications, valuation prep, and partner buyouts.

The Cash Flow Statement

This report shows how cash moves in and out of your business. It’s often overlooked—but it’s the #1 indicator of business health.

Key Sections:

  • Operating Activities: Day-to-day business cash (sales, expenses)
  • Investing Activities: Asset purchases, investments, etc.
  • Financing Activities: Owner draws, loan payments, capital injections

What to Watch:

  • Is cash coming from operations—or from loans?
  • Are owner distributions draining reserves?
  • Do inflows match reported income?

If you’re profitable on paper but broke in the bank, the cash flow report explains why.

Why This Matters for Charlotte Businesses

Understanding your financials helps you:

  • Make smart hiring and spending decisions
  • Plan for taxes (and avoid surprises)
  • Qualify for financing and credit lines
  • Spot fraud or mismanagement early

At Polaris, we don’t just hand you a report—we walk you through it each month.

Let’s Bring Clarity to Your Books

If you’re tired of guessing what your numbers mean—or if your current bookkeeper just dumps reports into your inbox—let’s fix that.

Schedule a free consultation with our Charlotte-based bookkeeping team and finally take control of your financials.

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