Your Accounts Are a Mirror — Most MSMEs Never Look Into Them...

In my fieldwork with MSMEs, I saw the same pattern repeatedly. Accounts are prepared carefully — but only for tax filing or bank CMA data. Once the return is filed or the loan is sanctioned, the books are put aside. They are treated as a compliance document or a borrowing tool, not as a living record of the business. This is a costly habit. Your Trading and Profit & Loss Account is a mirror. Express every major line as a percentage of sales and compare it with last year. You instantly get 20–30 clear ratios: material cost %, labour %, power %, gross profit %, overheads %, interest %, and net profit %. Even a one-percentage-point shift reveals wastage, inefficiency, or pricing problems that absolute numbers hide. Once these ratios become benchmarks, use the data you already generate every quarter — GST returns, wages, and electricity bills. These three alone cover nearly 80% of variable costs. Track them against your benchmarks every 90 days. Problems can now be corrected in the next quarter instead of being discovered at year-end. Sustain this for 6–8 quarters and small corrections compound into stronger margins and healthier cash flow — without any external consultant. The data is already with your accountant. The mirror is already there. Most units are simply looking the other way. Ask your accountant for one extra column this year: every major expense as % of sales, with last year’s figures beside it. Sit with those numbers for one hour. You may be surprised at what the mirror shows.