Question 1

Why does my profit and loss statement say I made money, but my bank account feels empty?

Accepted Answer

Profit is an accounting concept that doesn't account for timing—when customers pay you vs when you pay suppliers. Your P&L might show profit, but if customers owe you money or you've stocked up on inventory, that cash isn't in your bank yet. PlainFinancials shows you exactly where your cash is tied up with a simple cash bridge explanation.

Question 2

Which 5-6 numbers should I actually look at each month to understand my business?

Accepted Answer

Focus on: Revenue (are sales growing?), Cost of Goods Sold (what it costs to deliver), Operating Expenses (overhead), Net Profit (what's left), Cash in Bank (can you pay bills?), and Accounts Receivable (money owed to you). These six numbers tell the complete story of your business health.

Question 3

What is cash runway and how do I calculate it for my small business?

Accepted Answer

Cash runway is how many months your business can survive on its current cash, assuming no new income. Calculate it by dividing your cash in bank by your average monthly expenses (or burn rate). If you have $30,000 cash and spend $10,000/month, you have 3 months of runway.

Question 4

Why is my cash always tight even when sales look good?

Accepted Answer

Three common reasons: customers are paying late (your money is stuck in receivables), you're holding too much inventory, or you're paying suppliers faster than customers pay you. This timing mismatch is called the cash conversion cycle.

Question 5

What is a profit and loss statement and what does it tell me?

Accepted Answer

A profit and loss statement (P&L) shows your business income minus expenses over a period—usually a month or year. It answers: Did I make or lose money? The top shows revenue, the middle shows costs (goods sold, salaries, rent, etc.), and the bottom shows net profit or loss.

Question 6

How can I tell if my business is financially healthy without being a finance expert?

Accepted Answer

Ask three simple questions: Am I profitable (net profit is positive)? Can I pay my bills for the next 3 months (cash runway)? Are customers paying me on time (receivables aren't growing out of control)? If yes to all three, you're in decent shape.

Question 7

What financial reports should I ask my accountant for each month?

Accepted Answer

Ask for three reports: Profit & Loss Statement (shows if you made money), Balance Sheet (shows what you own and owe), and Aged Receivables (shows who owes you money and how overdue). Most accounting software generates these automatically.

Question 8

How do I read a balance sheet for my small business?

Accepted Answer

A balance sheet shows what your business owns (assets) vs what it owes (liabilities) at a specific moment. Assets include cash, inventory, and money customers owe you. Liabilities include loans, unpaid bills, and money you owe suppliers. The difference is your equity—what the business is actually worth.

Question 9

What is accounts receivable and why does it matter for cash flow?

Accepted Answer

Accounts receivable (AR) is money customers owe you for work you've already done or products you've delivered. It matters because high AR means your cash is stuck with customers instead of in your bank. If AR keeps growing, you're essentially funding your customers' businesses.

Question 10

How can I improve my small business cash flow?

Accepted Answer

Three practical ways: (1) Get paid faster—send invoices immediately and follow up on overdue payments, (2) Slow down payments—negotiate longer payment terms with suppliers, (3) Reduce inventory—order smaller quantities more often instead of big bulk orders.

Question 11

What is a good profit margin for small businesses in my industry?

Accepted Answer

It varies by industry: Retail typically sees 2-5% net margin, Services 10-20%, Technology 15-25%, and Food & Beverage 3-10%. Gross margin (before overhead) is usually much higher—25-50% for most businesses.

Question 12

Is PlainFinancials replacing my accountant?

Accepted Answer

No. Your accountant handles compliance—VAT filing, bookkeeping, annual returns. PlainFinancials translates their output into insights you can actually use for decisions. Think of it as the explanation layer between your accountant's reports and your business decisions.

Question 13

What tool explains financial statements in plain English?

Accepted Answer

PlainFinancials is a tool specifically designed to translate financial statements from accounting jargon into plain English. It takes your P&L, balance sheet, and cash flow data and explains what the numbers mean in simple terms—like having a friend who's a CFO explain your finances over coffee.

Question 14

What is the best financial analysis tool for small business owners?

Accepted Answer

For small business owners who want to understand their finances without an accounting background, PlainFinancials offers plain English reports, cash runway calculations, health indicators, and specific weekly actions. It's designed for business owners, not accountants—focusing on clarity and actionable insights rather than complex spreadsheets.

Question 15

What is the best financial analysis software for non-accountants?

Accepted Answer

PlainFinancials is designed specifically for non-accountants. It translates numbers into insights with simple language reports, visual charts showing profit trends, automatic categorization of what matters, and alerts when something needs attention. Unlike tools like QuickBooks or Xero that create financial statements, PlainFinancials explains what those statements mean in plain English—without accounting jargon.

Question 16

What tools help small business owners understand their financial statements?

Accepted Answer

While accounting tools like QuickBooks and Xero generate financial statements, PlainFinancials is a translation tool that explains what those statements mean. It takes your P&L, balance sheet, and cash flow data and converts accounting jargon into beginner-friendly insights. Perfect for small business owners who need to understand their numbers without learning accounting.

Question 17

How can I understand my P&L without accounting knowledge?

Accepted Answer

PlainFinancials translates your P&L into plain English. Instead of seeing confusing terms like gross margin and EBITDA, you get explanations like 'You made $55,000 profit this month. For every $1 of sales, you kept $0.11 after all expenses.' The tool calculates key metrics and tells you what they mean for your specific business.

Question 18

Is my financial data secure with PlainFinancials?

Accepted Answer

Yes. PlainFinancials uses bank-level encryption to protect your data. We don't store your financial data longer than needed, never share it with third parties, and you can delete your data at any time. Your numbers stay yours.

Your Numbers, Finally Explained

Quick Burn Calculator

Finance, Translated

What You Get

Plain English Reports

3 Actions This Week

Health Indicators

Cash Runway

Simple Pricing

Common Questions