Financial reports are critical to the success of your business. We coordinate with your tax professionals to always have ways to improve your business and set you up for the future. We found during these times that it is very important for your business to have up-to-date financial reports and continue to keep them current. There are two critical financial reports that every business needs, and it is imperative that you be familiar with both of them.
P & L
It is not pickles and lettuce added to your lunch order.
The Profit and Loss statement (P&L) is a critical financial report that summarizes the revenues, costs, and expenses incurred during a specified period. The P&L statement is synonymous with an income statement. This statement is all about showing your business’ performance over time. Essentially, it tells you if your business is performing with your expectations.
Understand your revenue. It is also helpful to understand if you have different revenue streams. One example of this would be a product vs a service. You could have both. When you examine the money that is coming into your business, you have an opportunity to see which revenue streams are the most profitable by identifying your expenses.
Understand your expenses. All money you spend. This is all funds you have going out of your business.
Balance Sheet
The Balance Sheet is another vitally critical financial report that you should be familiar with and understand. It is a statement of the financial position of a business that lists the assets, liabilities, and owner’s equity at a particular point in time. It is the fundamental report of a company’s possessions, debts, and capital invested. It give you insight into how much debt you carry and what you own. This gives information about the companies and its operation.
Each month you need to review your P & L and Balance Sheet to see just how your business is doing, especially during these uncertain times. The better you understand your financial picture, the better you’ll be able to make important decisions and develop a financial strategy.
We Can Help
Need help understanding your financial picture? We’re here to help you! Reach out to schedule a complimentary consultation and learn how we can help you save time and money on a daily basis.
