BUSINESS

Who Cares About Profit and Loss?

Your Balance Sheet is more important

Around 1:00 AM one Sunday morning a decade or so ago I was awakened by a car alarm and laughter. It went on long enough to get me out of bed and to the window, but was just noisy party-goers leaving a neighbor’s house and accidentally setting off their car alarm. I crawled back to bed, but couldn’t drop back into my dreams.

What kept me awake was that I had been looking at my financial statements just before heading to bed. There was an apparent problem, a $5,000 discrepancy that I felt should have been in my bank account but was not. I had decided to look at that in the morning, but now I squirmed around and pummeled my pillow as the figures darted around my mind. Something was wrong and I wouldn’t get any more sleep until I found out what.

There was a time when I wouldn’t lose any sleep over something like that. I don’t mean that it wouldn’t have concerned me; just that I would have been able to get back to dreamland easily because I would have been carrying so much more money in my account that $5,000 was a relatively small amount. I was buying and selling equipment along with doing consulting then, but I had more recently dropped back to only selling my time. The cash flow was smaller; five grand stood out.