When it comes to running a business, there is a lot of financial data and information that needs to be compiled and organized. This is known as bookkeeping. It helps you know the financial position that your company is in so that you can make smart decisions for the growth and success of the company. There are some financial statements that are more important than others. Propel Your Accounting is here to talk about the most important financial statements that you have to make sure are done accurately and timely for your business to thrive.
These Are the Most Important Financial Statements for Business Owners
An essential part of owning and operating a business is bookkeeping. It is something that many people aren’t skilled at doing so they turn it over to the pros for help. This ensures that the bookkeeping is accurate and can provide the owners with the information needed to run the business and daily operations. Here are some of the most important financial statements:
– Cash Flow Statement: Knowing where the cash is going in your business is essential to running your business. It lets you know where the cash has gone pertaining to your daily operations. There are several categories involved in the cash flow statement which will depend on the size of the company. The overarching purpose for the cash flow statement is to know where the money is going as well as how much money is coming in. That way if you are spending more than you’re making, the proper adjustments will be made.
– Income Statement: The importance of the income statement is that it shows the company’s net loss as well as the net income. It will show expenses, or money that is going out, as well as revenue, which is money that is coming in. The income statement shows important information like operating expenses, non-operating expenses and sales. This statement is often referred to as a profit and loss statement.
– Balance Sheet: There is loads of important information that can be found on the balance sheet. This one financial document will show things like shareholder equity, owner equity, the company’s liabilities, and the company’s assets. On the left side of the balance sheet, you will see the company’s assets. On the right side, you will see the equity and liabilities. This data will help owners see exactly where the financial position of the company lies in that moment in time.
Bookkeeping, Accounting, Business Consulting & HR / Admin Services in the United States of America
If you aren’t skilled in accounting, you need to hire the professionals at Propel Your Accounting to ensure your bookkeeping is accurate and up to date. We will handle all of your accounting needs including tax planning, consulting and bookkeeping. You can trust that our team of professionals have your company’s best interest in mind when we are working with you to take your business to the next level. Call us today!
