Financial statements are a quick and organized way to view the complete financial status of your company. This is done through monitoring overspending, underspending, excessive outgoing funds, and other areas where your company may excel or fail. The main benefit to having a proper statement is to help you make educated decisions on your spending throughout the quarter or year. Finding a professional firm that is experienced in financial statement preparation in Nanaimo is important for businesses of all sizes to help them excel, grow, and expand.
The Three Main Types of a Business Financial Statement
While each accounting firm may have their own way of preparing a financial statement, there are normally three sections that can be focused on. The balance sheet is a way to view your assets and liabilities which can include what your business earns, what it owes, and what it may be owed. The balance sheet will also include owner equity which will be the profit, or the balance remaining after liabilities are subtracted from assets. Income statements are the second type and are sometimes referred to as the profit & loss statement. This chart includes the profit expectations of your business over a certain amount of time. It can also show the potential financial losses. And finally, the cash flow statement is a quick way to view and organized graph of how much funds are flowing in or out of your company. This can be due to equipment purchases, insurance costs, employee salaries, and other necessities.
Realizing the Benefit of Having a Proper Financial Statement
In many ways, a well-organized statement can help you apply and be approved for business loans or vendor credit. When goods or services are being offered in advance of payment, a vendor will ask to see a business sheet. This guarantees he will receive his compensation after the goods are supplied. If a vendor sees you are floating in debt, they may decline participation to preserve their own financial stability. In addition, having your statement professionally created by an accountant can help with your tax obligations as they apply to your area. This can apply to annual taxes as well as payroll taxes for employees. Having access to a properly prepared statement will also prevent any issues during a company audit. Be sure to hold onto receipts and other records which match your statement to prevent any confusion or doubt in the auditor’s mind.
If you are searching for a financial statement planner in Nanaimo, don’t hesitate to contact J A Smith & Associates Inc. Their professional team can help you understand and analyze your statements. To know more follow them on Google+.
