The Accounting Reports You Need for Success
When most business owners think about accounting, taxes are the first things to come to mind. There are many different types of taxes to keep track of, however, there are many more reports your accountant can give you to help your business succeed.
Income/Profit and Loss Statement
Your profit and loss statement is one of the most important reports that your company can have. This shows you where your money is coming from and where it is going to and can give you valuable advice for how to move forward. For instance, it can tell you how much you spend for your website and how much income comes from it. You can compare these statements between years to see how your investments are benefitting your company.
Accounts Receivable and Payable Aging
Accounts receivable are the invoices of what your customers owe you and accounts payable are the invoices of what you owe your suppliers. Your accountant will usually give you a report for each of these things to show you how you are going on collecting your fees and which bills are coming due. These reports help you cut ties with customer who are habitually late, they also help you avoid late fees yourself and build better business relationships with suppliers.
An important accounting report to have is a balance sheet. This report gives you a snapshot of where your company stands with finances including both assets and liabilities. Assets can mean everything from the balance of your bank accounts to the saleable property your business has. Liabilities include loans and lines of credit. Your accountant will subtract your liabilities from your assets to find your equity. This is also an important sheet because it can show you how much of your assets are liquid and therefore can be used to pay bills.
Revenue by Customer
Knowing how much each customer pays you is important for a couple of different reasons. Not only can you focus appropriate attention on your biggest customers, you can also see if your business runs the risk of putting too much on one client. For instance, if more than half your income is from one client and they leave or go out of business, then your company is in danger.
Having an accountant for your small business can be incredibly useful for more than just taxes. He or she can give you an accurate snapshot of your financial situation, help you plan for future growth and even show you which customers to extend credit to. Having the right accounting reports is essential to the proper running of your company, no matter the size.