There are a number of financial reports that can give information on the business’s past, current, and future financial state. The top five financial reports that every business owner has to regularly and yearly review to better understand the business’s financial performance are listed below.
- Balance Sheet. It provides a snapshot of a business’s financial position, including the economic resources the business owns or owes and the sources of financing for those resources.
- Income Statement. It summarizes the total revenues and expenses incurred by the business, showing the profitability (net income or net loss) over a specified period of time, usually a month, quarter, or year.
- Cash Flow Statement. It is presented in three sections: operating, financing, and investing activities, and it indicates which areas of the business are generating and using the most cash. One of the best uses for the Cash Flow Statement is to estimate future cash flow, which will assist with budgeting and decision-making.
- Accounts Receivable Aging Report. It categorizes outstanding accounts receivable into groups based on the due date of the invoice, typically current, as well as 1-30, 31-60, 61-90, and >90 days overdue.
- Budget vs. Actual. It can help identify areas that were over or under budget, indicating the ability to hire additional employees. The Budget vs. Actual Report should be prepared on a monthly basis and reviewed with the financial statements to determine if any areas of the business are not meeting expectations and should be investigated further.
We consistently provide timely and accurate financials and reports (like the ones mentioned above) on a monthly basis, as well as the actionable financial analysis you need to effectively run your business, analyze operations, and guide business decisions. If your business needs support, contact us today to schedule a consultation.