When we say business, we mean loads and loads of paperwork regarding taxes and what not? However, it is essential to maintain records as it not only benefits the business but also helps expand, improve and grow your business in a systematic manner. If you are somewhat confused about what accounting reports you need, check out these tips from Paul Siderovski.
We provide you with a list of certain accounting reports that serves as a saviour and makes you aware of it for the future:
- Income statement
Indeed the most important one to have in order to keep track of your profits and losses. Any kind of business requires this as it tells them how much profit or money a business is making or losing throughout the year. These record states where is the money being spent, as well as where is it coming from. For instance, an ad agency will look at it to get an idea on how much they are spending on the travel, internet cost etc. Different kinds of business will have different kinds of details in P&L account.
People running small business must keep a check on their income statement at least monthly to increase their profit by managing and adjusting their work accordingly.
- Balance sheet
This accounting report is basically a window to see what does the firm own at a time. Small business generally includes account receivables, bank accounts and maybe an account on investment. Balance sheets also involve assets like equipments, computers, property and other kinds of intangible property. Liabilities will include business loans, credit cards and anything a business owes. Basically the accounting game is particularly based on these balance sheets. See Siderovski’s Twitter about the importance of maintaining a reliable and accurate balance sheet.
- Accounts receivable
Since, your business is no charity and you ain’t working for free, sending invoice is something one has to do. Your payments should be made on time and shouldn’t be over due, in order to keep a check on that this accounting record is required. Also it states about the customers who are not paying on time as it describes your collections side as well.
- Customer Revenue
Just like how we pay heed to those who owe us good amount of money, one must also keep a check on those who give ample of it. This accounting report tells you about the client who has given you most revenue so that you maintain and build relations with the good clients. Doing so will make your income stream healthy, lucrative and reliable. But at the same time, be cautious of the ones who are giving you revenue more than necessary as it can lead to concentration risks.
- Accounts payable
Just like you wouldn’t find it nice if the companies didn’t pay you on time, same would not be appreciated by other firms if you do so. This report will let you know whom you owe and hence would make your life easier. Not making payments on time can ruin the relationships which is a big no-no.
I know book-keeping isn’t fancy but nevertheless it is quiet critical for your firm’s success! So do keep one.