If you are an agency leader, one of your key areas of responsibility is making sure you are investing in the right areas to grow and scale your agency. One of the best ways to do this is to know your numbers and review your financial statements carefully to look for insights and opportunities for improvement.

However, for many, this is not an area of strength. Over half of small business owners operate without a budget, according to a survey conducted by Clutch, and many do not review or even generate monthly financial statements.

Reviewing financial statements can be confusing or overwhelming, but here are four things you can learn:

1) Allocation of resources. Review your profit and loss statement and categorize your expenses. This will allow you to review your allocation of resources to each of these expenses and how they relate to each other. Once the expenses are categorized, it is easier to identify redundant or unnecessary costs.

Also, divide the total of each expense category by total revenue to determine the percentage of revenue you are allocating in each area. There are benchmarks available for each of these categories in the Big “I" Best Practices Study that you can use as a guide in evaluating your allocation.

2) Opportunities for automation and outsourcing. Outsourcing and automation can be a smart strategic move, especially as your customer and carrier partner expectations continue to change. By reviewing your financial statements and key performance metrics, you can focus on identifying possible areas for improvement. Focus on the areas that can help you reduce costs, streamline processes, create efficiencies, increase capacity and allow your current team to focus their efforts on the tasks that are aligned with their expertise.

Possible areas to consider for automation or outsourcing include accounting and bookkeeping, IT services and marketing and claims processing, as well as administrative and repetitious tasks like data entry and appointment setting. However, do your research to ensure that the outsourced work is being completed by someone who understands your business and has a proven track record.

3) Opportunities for expansion or elimination. By organizing and reviewing the financial reports, you can identify the areas of your business that are the most profitable or not performing well. It can help you know which areas need your attention. Some areas may need to be reduced, reworked or even eliminated, while you may want to invest more time and resources in other areas. By reviewing your reports by customer type, line of business, specialty or niche, you can quickly determine the areas where you should focus.

4) Compensation strategy. By reviewing your financial reports and comparing them with industry metrics, you can determine if your compensation strategy needs improvement. Make sure that your most valuable asset—your people—are compensated fairly and properly motivated to hit the performance standards aligned with your overall goals. If you adopt a compensation structure that is not aligned with the industry or your goals, you may need to rework it to drive strong business results.

By carefully examining your financial statements, you can quickly identify opportunities to improve. Even the smallest changes can have an enormous impact on your agency over time. The agencies that are positioning themselves for the future are the ones that know their numbers and are running their agencies like efficient businesses. Since your agency is a sizeable asset, it makes sense to spend time understanding the financial metrics that will help it grow and maximize its value.

Carey Wallace is founder of AgencyFocus, an independent insurance agency consulting company.