Every month, your accountant produces three financial statements: the Profit & Loss (Estado de Resultados), the Balance Sheet (Balance General), and the Cash Flow statement (Flujo de Caja). Together, they tell the complete financial story of your business.
Most small business owners in Bolivia receive these reports, nod at the numbers, and move on — not because they don't care, but because no one ever explained what to actually look for. This guide changes that. We'll walk through each statement, explain what the numbers mean in practical terms, and show you the five questions you should ask every time you review your financials.
Statement 1: The Profit & Loss (Estado de Resultados)
The P&L answers the most fundamental question: Did your business make money during this period? It covers a specific time window — usually a month, quarter, or full year — and shows revenue, costs, and what's left over.
What to look for in your P&L
Statement 2: The Balance Sheet (Balance General)
The balance sheet answers: What does your business own, what does it owe, and what's left for you? Unlike the P&L which covers a period, the balance sheet is a snapshot at a single point in time — usually the last day of the month.
It's organized into three sections:
- Assets (Activos): Everything the business owns — cash, inventory, equipment, money owed to you
- Liabilities (Pasivos): Everything the business owes — supplier debts, loans, tax obligations
- Equity (Patrimonio): What's left after subtracting liabilities from assets — the owner's stake in the business
What to look for in your Balance Sheet
Statement 3: Cash Flow (Flujo de Caja)
The cash flow statement answers: Where did money actually come from and go during this period? This is the statement that trips up the most business owners, because a business can be profitable on paper (per the P&L) and still run out of cash.
How? Because the P&L records revenue when an invoice is issued — not when it's paid. If you issue Bs. 50,000 in invoices in September but only collect Bs. 20,000, your P&L shows Bs. 50,000 in revenue but your bank account only received Bs. 20,000.
What to look for in your Cash Flow
The 5-Minute Monthly Financial Review
You don't need to be an accountant to use your financial statements effectively. Each month, spend five minutes asking these five questions:
- Is my gross margin the same as last month? (P&L)
- Is my net profit trending up, down, or flat over the last 6 months? (P&L)
- Are my accounts receivable growing or shrinking? (Balance Sheet)
- Do I have enough cash to cover next month's obligations? (Cash Flow + Balance Sheet)
- Are there any expenses that look unusual this month? (P&L)
If you can answer all five questions confidently, you understand your business's financial health. If any of them gives you pause, that's where to focus your conversation with your accountant.
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