Accounting Reports: Have you looked at yours?
Small business owners should make themselves very familiar with certain reports for their business. This allows owners to not only see how the business is doing but also allow them to make changes and improvements along the way.
Balance Sheet- This report is a rolling picture of the business’s financial position at a moment in time, normally at month end or year end. It shows the business’s assets, liabilities and owner’s equity.
Profit & Loss- This report is the most important to a business owner. It reveals if the business is achieving its profitability goal and generating an acceptable income. The profit & loss summarizes the revenues earned and expenses incurred over a specific period of time.
Statement of Cash Flows-Cash flows reveal the inflows and outflows of cash in a business. This report would reveal the cash produced by the business as well as any investing and financing activities that have taken place during an accounting period.
Accounts Receivable Aging- This report is a detailed presentation of all the accounts receivable that is open and outstanding, owed to the business. It is beneficial for controlling and limiting receivables from becoming aged longer than the accepted terms of payment.
Accounts Payable Aging-This report is a detailed presentation of all the accounts payable that is open and owed to outside vendors. It is beneficial for keeping track of what payables are owed and when they are due.