Accurately tracking financial data is critical for running day-to-day operations
Investors and lenders often require financial statements from small businesses. Whether you need a compilation or a review, we can help you. Additionally, our services are provided at a reasonable cost.
Accurately tracking financial data is critical for running day-to-day operations of your small business, and needed if you are looking to get funding to increase your business. In addition, keeping tabs of your finances can help ensure your products and services are priced right, identify what your margins are, determine your cash flow and make filing taxes easier.
Three basic financial statements are crucial for your small business:
- Balance sheet. This statement provides an overall financial snapshot of your small business. As an equation, it looks like liabilities + owner’s equity = assets. The two sides of the equation must balance out. There are two types of assets: current and fixed. Current assets include cash or other holdings that can quickly be converted to cash within a year. These may include inventory, prepaid expenses and accounts receivable. Machinery, equipment, land, buildings, furniture and other essentials that you are not planning to sell are considered fixed assets. Liabilities can be broken down into current or short-term liabilities, such as accounts payable and taxes, and long-term debt such as bank loans or notes payable to stockholders.
- Income statement. Also known as a profit and loss statement, also referred to as an income statement, enables you to project sales and expenses and typically covers a period of a few months to a year.
- Cash flow statement. This statement highlights how much money is coming in to (cash inflows) and going out of (cash outflows) your business. Cash inflows include cash sales, accounts receivable collections, loans and other investments. Equipment purchased, expenses paid, inventory and other payments are considered cash outflows.
Why outsource financial reporting services?
Financial reporting is critical for any organization. Financial reporting involves the collection, analysis, summarization and presentation of the financial health of a business.
Outsourcing financial reporting services to an expert can give your organization access to the following benefits –
- Save on the time involved in analyzing and preparing financial reports
- Avoid spending money on costly financial reporting software
- Improved and efficient decision making
- Accurate and error-free analysis of data