Whether a company is on a small-scale or a huge industry, whether one has taken it upon themselves to develop accounting statements or has a whole team for it, accounting statements’ role is unmatched. The accounting statement is a statement of proof that would aid you in highlighting the financial health of your company to all the stakeholders involved.
Business owners often tend to overlook these statements, but that is where things start going downhill for them. Being aware of the financial complexities of the company and laying them out in a neat way would only make things better for the company.
Listed below are a few reasons why you should pay more heed to your accounting statements:
- As mentioned, the stakeholders involved in the business need to have constant assurance regarding the company’s financial health. Through these accounting statements, they would stay aware of what is going on behind closed doors.
- Any potential investors you may approach for your business would ask to see your financial statements. It would allow them to judge the potential of your business.
- The business’s managerial staff would inquire to see the financial records so they can plan all future endeavors for the company accordingly.
- Any lender or bank needs financial statements to analyze the business before handing over a loan.
- You could halt your supply of goods if the vendor does not see the potential in your company for payment, so you must show them your financial records.
- It serves as a money trail for the government to track. It also helps in sorting your taxes.
- The competition in the market uses these statements to analyze what they must deal with moving forward.
- Your company’s financial statements may even help you build a rapport among the public, which would, of course, boost your business’s sales.
Income statements:Income statements are financial records that usually track the profits and losses that the company has gone through during a given period. These statements reflect the profits as well as the costs it had to sustain. Income statements would cover all economic activity and keep a clean record of it in a systemized manner. It would cover all expenses, from procuring goods for the company to the paychecks paid each month.
Balance sheets:A balance sheet defines the financial situation of a business at a specific time. These sheets work as a financial summary to identify the liabilities that a company is prone to and the assets that it must preserve. Balance sheets are different from other accounting statements because they capture a specific time’s statistics rather than dealing with a prolonged period.
Cash flow statements:As the name suggests, a cash flow statement covers the inflow and outflow of cash over a specified bookkeeping period. Cash flow statements cater to the monetary exchange and how it may affect the business in an aggregated form. It allows business owners to analyze the monetary situation by understanding the accumulation of funds. Cash flow statements also will enable the business owners to investigate the operations that a company is involved in at a given time.
Account statements are a necessity for all those people who wish to see their businesses succeed. If you haven’t paid much heed to it already, you can always start today. About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.