Many small and medium size businesses stagnate or even fail because too often the owner loses a grip on the company’s financial position. In our course of work, we regularly meet entrepreneurs who were flying blind without even bothering to know how well or how bad is their business performing. They tend to become complacent, sit back and relax if the business is doing well or doing something wrong without even realizing it.
Therefore, it is extremely important for you, as the business owner, to certainly have an understanding of the big picture. This is where financial statements can play a crucial role. Thus, the basic reports that can help you in understanding your financial position are Income Statement, Balance Sheet and Cash Flow Statement. We will help you to generate these reports on a regular basis, which helps to determine your firm’s profitability, financial position and cash flow position at any point in time.
Financial statements can be prepared for your business for any given length of time or at any point in time. At the very least, it is required to be prepared at the company’s financial year end for regulatory submission purposes such as income tax filing. The following are some of important the important benefits of regular preparation of financial statements:
- Enable you to keep a tight handle on the company’s financial performance and position
- Helps you to decide on operational and strategic decisions
- A must have component for any business plan preparation and to get investment or loan financing
- Displays the firm’s Account Receivables and Account Payables position, offering a valuable information in knowing how much cash flows is coming in or out of the company
- Useful in tax planning preparation to minimize tax liability