As a small business owner, you wear a lot of hats. Keeping track of your finances is essential to the success of your business, but it's also a lot of work. That's why it's important to hire a bookkeeper you can trust to give you accurate reports. But what exactly should those reports include? In this blog post, we'll go over some of the essential reports your bookkeeper should be giving you on a regular basis. A bookkeeper can help you keep track of your finances, stay organized, and save money. But what exactly should you be getting from your bookkeeper? Here are a few things to look for: > Accurate and up-to-date financial statements - Your bookkeeper should be able to provide you with accurate financial statements that are up to date including a balance sheet, profit and loss, and cash flow analysis. > A bookkeeper should be able to help you manage your cash flow and plan for tax season > A bookkeeper should be able to offer advice on how to reduce your expenses > A bookkeeper should be able to offer insights on your company's financial health Most people have heard of a balance sheet but don't really know what one is. A balance sheet is a financial statement that shows a company's assets, liabilities, and equity at a given point in time. The assets on a balance sheet can include cash, investments, inventory, accounts receivable, and property. The liabilities might include accounts payable, taxes, and debt. The equity is the difference between the assets and the liabilities. The balance sheet is just one of the financial statements that a company will use to give people an idea of its financial health. A profit and loss (P&L) statement is a financial statement that summarizes a company's revenue, expenses and profits/losses over a period of time. This period is typically one year, but can also be quarterly or monthly. The P&L statement is also sometimes referred to as the income statement or the statement of operations. Understanding the P&L statement is important for all business owners, as it can help you to make informed decisions about where to allocate your resources and how to price your products or services. It can also be used to assess your business's financial performance over time. A cash flow statement is a document that shows how much cash a company has on hand. It includes all of the company's revenue and expenses for a given period of time. The cash flow statement has three main sections: operating activities, investing activities, and financing activities. Operating activities include all of the company's activities that generate revenue, such as sales. Investing activities include all of the company's activities related to its investments, such as buying or selling property. Financing activities include all of the company's activities related to its financing, such as issuing or repaying debt. The cash flow statement can be used to help a company assess its financial health and make decisions about where to allocate its resources. If you are not getting these financial reports from your bookkeeper on a regular basis, make sure you check and see what is included in your contract. If regular financial reporting isn't specified, it may be a good time to renegotiate your bookkeeping contract or explore options for other bookkeeping firms. Running and receiving regular financial reporting from your bookkeeper is an important part of running your business. Without this information it is difficult to determine the financial health of your business, create accurate budgets, or assess how funds should be allocated.
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