If you're a chiropractic business owner, you probably didn’t go to school to become a financial expert. But understanding your business finances is key to growth, stability, and long-term success.

The good news? You don’t need to be an accountant to know what matters in your reports. In this guide, I’ll break down the three key financial reports every chiropractor should review monthly:

• Balance Sheet
• Profit & Loss Statement (P&L)
• Cash Flow Statement
  

1. The Balance Sheet: A Snapshot of Your Financial Health

Your balance sheet shows what your business owns (assets), owes (liabilities), and your equity (what’s left over).

Key things to check monthly:
✔️ Have any new assets over $2,500 been recorded? (Equipment, tables, office improvements)
✔️ Are all loans and credit cards showing up accurately?
✔️ Have you reported personal funds used for business expenses to your bookkeeper?

2. Profit & Loss Statement: Your Business’s Income & Expenses

Your P&L statement (also called an income statement) tells you how much revenue you made and how much of it you kept as profit.

💡 Pro tip: Run your P&L with percentage columns to see what percentage of revenue is spent on each category.

Focus on these key areas:

• Revenue Trends: Are you growing? What months are busier/slower?
• Major Expenses: Watch out for these common problem areas:
  🔹 Marketing/Advertising – Should stay around 2-4% of revenue
  🔹 Credit Card & Loan Interest – Keep under 2%
  🔹 Office/Admin Costs – Shouldn’t exceed 5%
  🔹 Payroll Costs – Under 50% for S-Corps, 30% for LLCs
  🔹 Rent – Ideally 6% or less (though this varies by location)

📌 Set goals for your expenses & profit margin each month. If an expense category is creeping up, take action to cut costs or reallocate spending.

3. Cash Flow Statement: Where Did Your Money Really Go?

Ever looked at your P&L profit and wondered, "So where's all my money?" That’s where your cash flow statement comes in.

Your cash flow statement shows:
✔️ How much cash actually came into your business
✔️ How much you paid in loan principal & owner’s draws
✔️ The actual increase or decrease in cash for the month

If your cash is decreasing month after month, it’s a sign to reevaluate spending and debt payments.

Numbers Don’t Lie—Use Them to Make Smart Decisions

✅ Run and review your reports every month.
✅ Set clear goals for profit margin & expenses.
✅ Use the numbers to make decisions—don’t just look at them!

💡 Want a guide to help you see what a healthy P&L should look like? Download my Free Sample Chiro P&L.