The Financial Statement for your business is probably the single most referred to report that your company will produce. It comprises several other documents including the Balance Sheet and the Profit and Loss statement and provides all of those looking for a complete financial picture of your business with a detailed account.
So, who actually uses the information in a financial statement? Which groups of people find such things essential and why?
Owners & Managers
First and foremost you will need the information yourself as the owner of the business without the information in a financial statement it would be very difficult to make any important business decision. Read more
Financial Statements are used to find the financial health of a company or of an individual. Financial statements for companies and firms are usually prepared by Certified Public Accountants (CPAs). It does not hurt to understand what goes into the work for a financial statement to give you a good idea of your company’s financial health. There are four basic statements to be considered, Balance Sheet, Income Statement, Statement of Retained Earnings, and Statement of cash flow.
The Balance Sheet also referred to as statement of financial position or condition, reports on Assets (anything of value), liabilities (anything owed to others) and Owner’s equity. Read more
Account reconciliation involves looking at an account statement and determining whether the balance shown in your records matches the balance shown by the bank’s records. For some, this leads to a headache, especially if accurate records have not been kept. However, this accounting activity is essential for knowing:
Whether the bank has made an error in computation Whether transactions were not completed Whether a client’s or customer’s payment was not received Whether a check you received bounced Your correct current financial situation Whether payments you made cleared or not
What Accounts Need Attention?
When running a business, reconciliation is not as simple as simply ensuring your business’s checking account is accurate. Read more