Four Important Financial Reports and Why You Need Them

by | May 15, 2019 | Bookkeeping

How much can you handle?

If you run a body shop or a hair salon or you own any other small business, you probably don’t know much about financial reports. If you’re like most small to medium-sized business owners, you spend so much time growing your business, you might not even care.

Of course, you care… but just in case you don’t, that’s just one of the perks of having a Goode Bookkeeping professional monitor and organize your important financial details.

A financial expert monitors your business’ financial well-being and keeps your cash flow on track. He or she will spend time doing what they do best: managing bookkeeping tasks you never wanted to take care of in the first place.

That’s where financial reports come in

Even if you don’t like crunching business numbers, you need to understand them. You need to know if your business is growing, moving forward, or standing still.

A professional bookkeeper understands that you need to know so they produce these four important financial reports that help you visualize your progress. (FYI, these are user-friendly explanations. Financial reports are a bit more complicated because they have to be.)

Income Statement

Your income statement is a snapshot of how your business is doing over a designated period. It helps you pinpoint key business trends. It also summarizes business revenue and expenses, shows profits or losses, and helps you understand if you’re on track for success.

Balance sheet

A business balance sheet is a statement that confirms your business’s financial health. It measures, analyzes, and balances these important data sets against one another.

  • Assets: cash, inventory, accounts receivables, raw materials, etc.
  • Liabilities: debts, accounts payables, etc
  • Equity: retained earnings and stockholder or investor stakes in your company

Cash Flow Statement

A cash flow statement tracks the way money enters and exits your business. It can be critical to your small business when you need to show potential investors or a loan officer the cash you take in from sales, loans, investors, etc. It also documents how cash leaves your business via bill payments, business expenses, supplier payments, and other costs.

Accounts Receivable and Accounts Payable Aging Reports

Receivable aging reports track customer payment histories. They help you gauge their reliability and serve as a trigger that reminds you to follow up on payments when they’re overdue.

Payable aging reports monitor your debts and payment-due histories to keep you on track for timely supplier payments.

 

Financial reports when you need them

At Goode Bookkeeping & Consulting, we know that you’re busy. You don’t have time to track business trends or analyze data. You just want to know how your business is doing. That’s why our professionals run the numbers for you.

We perform important bookkeeping tasks, sync your accounts, track your cash flow, keep your financial data safe in a secure cloud environment, and perform other important financial tasks. When you decide it’s time to take a look at a financial report, we produce it on demand.

We understand that financial reports can seem unnecessarily complicated and data heavy. If you don’t get the numbers (or don’t have time to figure them out) we’ll explain them in a way that makes sense.

Contact Goode Bookkeeping & Consulting

For more information about financial reports and our recommended methods for tracking your business data, call us at 860-659-6543 or complete our consultation form to arrange your free consultation.

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