The short answer
Knowing your numbers means understanding break-even points, profit targets, cash flow, and upcoming tax obligations.
Knowing your numbers means more than checking your bank balance. It means knowing your break-even point, the revenue you need to make a profit, your margins, and the tax and GST bills coming up. Without those, you can work harder every month without getting ahead, and a strong cash balance can hide a looming shortfall.
What numbers should every owner know?
Break-even revenue: how much you need to sell to cover all costs.
Gross margin: what’s left after direct costs, as a percentage of sales.
Net profit: what’s left after all expenses.
Cash position: cash available after setting aside GST, tax and super.
Debtors: how much customers owe you and how overdue it is.
Upcoming liabilities: BAS, PAYG instalments, super and loan repayments.
Why isn’t the bank balance enough?
Your bank balance includes money that isn’t yours to spend: GST collected for the ATO, tax instalments due next month and super owed to staff. It also doesn’t show what customers owe you or what bills are coming. Two businesses with the same balance can be in very different positions.
How do you get to know your numbers?
Keep your bookkeeping current in Xero.
Work out your break-even with your accountant.
Set targets for margin and profit.
Forecast the next 3 to 12 months, including tax bills.
Review a simple monthly report and ask why things changed.
A typical Melbourne scenario
A Preston café owner felt busy and successful because the bank balance looked healthy. When her bookkeeper walked her through break-even, she realised she needed $42,000 a month in sales to cover costs, and some months were falling short. Lifting prices on catering and trimming quiet-day rosters moved every month above break-even.
Key takeaways
Know your break-even, margins and upcoming tax, not just your bank balance.
Your balance includes money owed to the ATO and staff.
Forecasting turns strong months into planned cash, not surprises.
General information only.
Read what business owners should review each month and important financial reports, or see our small business bookkeeping.
Marissa has over eight years of bookkeeping experience and a genuine passion for helping businesses take control of their finances. She's proactive, precise, and committed to making bookkeeping easy, accurate, and stress-free for every client she works with. Whether it's reconciling accounts, tracking cash flow, or streamlining financial systems, she's across the detail so you don't have to be.
