The Accounting Reports to Be Embraced by Every Business
Effective bookkeeping and accounting are the backbones of the progress of every business endeavors. The success of businesses is boosted by the use of the various reports resulting from accounting. When these reports are properly understood and used by those who run the operations of your business, and they will manage to make informed decisions that positively influence your company. Through production of detailed reports accounting helps your business to be understood by the public and its stakeholders. Highlighted below are the five accounting reports that are vital to the livelihood of your business.
To start with is the budget vs. the actual report of your business. These reports give the actual outcome of the operations of a business in comparison to the projected results. These reports are produced after every and used along with the company’s financial statement to enable the management to determine if the company is meeting their business targets.
The second one is the balance sheet report. It is through these reports that the liabilities and the assets of a firm are made known to the management and other relevant persons. It gives a highlight about how well your business is doing financially. The management of your business will need this report to help them make informed business decisions. It is through the provisions of this report that the creditworthiness of your firm will be scrutinized.
Another important report is the income statement of your business. This is an accounting report that is prepared on a monthly basis to inform about all the revenues and the expenses of a business. It is also commonly called the profit and loss account. This report gives information about how profitable your company hence allowing investors to evaluate the risk that it poses to their investment. It also helps the management of your business to track the performance of the products and the services of the company offers in the market.
Additionally, one should take note of the account receivable report. Businesses get the chance to categorize their accounts in various groups dependent on the information provided in the accounts receivable report. Having categorized the accounts your business will have the ability to track and manipulate how your cash flows work. This is possible through the efficient management of invoice and collection issues as enabled by the right use of account receivable report.
To end with is the cash flow statement. This report aims to give full details of all the cash coming through to and from your company over a particular time. It is a different statement in terms of the information it reports on, which is strictly money-based. The information contained in this statement is crucial in informing your business decision-making process.