There are lots of things you need to do to run a business. You have to have a product or service that people want and you need to keep track of what you are making. A business that is not making money has to make some changes to stay afloat. You want to make sure that if you are running a small or even a large business you have good accounting. At the end of the day the money is the most important part of the business no matter how you look at it. When you make money your customers will be able to continue to shop, your employees will have a job and you have income and success. There are lots of areas of accounting that need to be taken care of such as payroll, taxes and financial statements. As a business if you want to expand and you want to get a bank loan or you want to entice an investor you need to have financial statements prepared. They are a very important part of the needs of a business and should be done by a professional accounting firm. Mark Dicus & Company outlines what different financial statements your business may need to have prepared.
Prepare an Income Statement
You may need to have an income statement prepared. This is a statement that will show the net profit of the net loss of the company. The way this is done is by taking the sales, expenses and the general ledger of the company to create the statement. This is a statement that is commonly asked for by the company to know where they stand.
Balance Sheet in Accounting
When you are looking at the end of each cycle of the day, week or quarter the company would like to know where they stand. The way that they do that is by creating a balance sheet that will encompass any range of dates that you need. The balance sheet is a great way to see what happened in that specific time frame and how successful the business was.
Cash Flow Statement Formula
You also may want to know more about the cash flow of your company. Companies have money in different aspects, some of which are in actual cash. It is important to know the flow of the cash and what it is being used for and how it is being replenished. The cash flow statement can show the owner what is being used and where they may need to make some adjustments.
Financial Statement Analysis
If you are running the business and you need to make some decisions that may effect the company you don’t need to go through every single detail and dollar spent. What you do need to have access to is a financial statement that has been analyzed. This is a snapshot of the overall companies financial health. This is often enough for the owner to make some determinations that could catapult the business ahead.