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FINANCIAL REPORTS
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FINANCIAL REPORTS
Profit & Loss Statement
The Profit & Loss Statement, also known as an Income Statement, includes:
- The sources and amounts of gross income;
- Itemizes expenses
- Net income after expenses are deducted from the gross income.
This report has the nuts and bolts of where the company makes money and where it spends it.
If the report is laid out correctly and the information accurate a manager can isolate the greatest sources of income and areas of over-expenditure.
Although the Profit and Loss Statement will show the money a company has made for a stated period of time, it does not provide all the information a manager will need to make the correct decisions for his company.
A second report called the Balance Sheet provides the following information.
- Balance of Cash on Hand
- Balance of Accounts Receivable (money owed for services and/or products delivered)
- Balance of Money Lent
- Balance of Each Asset
- Balance of Accounts Payable (money the company owes)
- Balance of Loans
- Balance of each Liability
- Retained Earnings of the company as of the stated period.
This report is a "snapshot" of where the company stands financially at a stated period of time. At a glance a manager can see if the company is viable and worth more than what it owes.
A Cash Flow report simply shows all incoming cash and all outgoing cash no matter what the sources are. Although loan proceeds are not income and would not show in a Profit & Loss statement, the Statement of cash Flows would reflect the funds as cash in.
This is especially useful for companies utilizing the Accrual method because the manager(s) will then see what actual money has been received and what spent.
There are a variety of financial reports that can be utilized by managers to their advantage, as long as the information contained in the report is accurate. Specific transaction reports, bank reconciliation reports, missing check reports and collection reports are just a few that an experienced bookkeeper can generate.
Whether you use a bookkeeping computer program or the old fashioned Ledger pages, if the information is incorrectly entered the resultant reports will be useless.
A knowledgeable bookkeeper will:
- Track loans;
- Calculate depreciation and amortization;
- Correctly categorize all types of income and expense;
- Generate the necessary reports.
An experienced bookkeeper can save you thousands of dollars in the long run and is a valuable asset in the correct management of your business.
Total Tax Solutions offers professional and experienced bookkeeping services. We will set up your accounts on a computerized bookkeeping program and maintain your books for you with accurate and reliable financial reports at the end of each accounting period.
Bookkeeping Basics | Methods of Accounting | Bookkeeping Information
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Total Tax Solutions, Inc.
Email: info@totaltaxsolutions.com
Voice: (818) 352-0384 Fax: (818)
352-8684
Post Office Box 10865 Glendale, CA 91209-3865