The financial statements that you must understand in your business

[Oliver4smile]

Generally when someone ventures into a business, one of the most important tasks is the bookkeeper or the accountant that manages and records the finance of the business. If you do not have the necessary skills to take on this task by yourself then you can revert it to another person that your employee, who is experienced and can handle such tasks as well.

Either way, whether you are handling it yourself or giving it to someone else to manage, you have to be able to understand some of the basic financial statement to ensure that you stay up to date with how your business is progressing. The three financial statements that I believe that you need to be versed in are:
1. The balance sheet - this shows yoru assets and liabilities of the business and ensures that there are no discrepancies
2. The income statement showing the expenses and the income of the business
3. The cash flow projection to show how cash is coming into and being spent from the business and may include future predictions as well.

Are there are other financial statements or requirements that you feel that an owner should be well versed in?

From what you posted I can deduct that you know some things about accounting, that is a good thing because not everyone of us knows accounting, it is however beneficial.

 

[Niftyyem]

The only accounting I did was a while back in high school and was just for a year, however, it stuck with me and I think I can still do the non complex part if a small business is involved.

 

[Heatman]

Personally, when it comes to my business, the two major documents or records that are very important to me is the sales documents and the expenses documents. My stock document is also very important.

 

[Bright7777]

Financial statements and records at very important in running a business and every entrepreneur must understand or employ those who understand them.

 

[Heatman]

According to my own point of view, the financial statement you must understand in your business is that business is for profit not not loss. When you are doing a business and you are not profiting from the business you have to stop. That is not business

Yes, it is very correct that profit and loss account is very important in your business because it is what shows whether your business is growing or not in order for you to know exactly what to do to improve it.

 

[Partisan]

You must understand the difference between the credit and debit and also recurrent expenditure because you can't be spending without gaining it will run your business must also gaining to balance the spending

 

[tyrim88]

Generally when someone ventures into a business, one of the most important tasks is the bookkeeper or the accountant that manages and records the finance of the business. If you do not have the necessary skills to take on this task by yourself then you can revert it to another person that your employee, who is experienced and can handle such tasks as well.

Either way, whether you are handling it yourself or giving it to someone else to manage, you have to be able to understand some of the basic financial statement to ensure that you stay up to date with how your business is progressing. The three financial statements that I believe that you need to be versed in are:
1. The balance sheet - this shows yoru assets and liabilities of the business and ensures that there are no discrepancies
2. The income statement showing the expenses and the income of the business
3. The cash flow projection to show how cash is coming into and being spent from the business and may include future predictions as well.

Are there are other financial statements or requirements that you feel that an owner should be well versed in?

That is a good point you just highlited.Any business that is desirious of sustained growth and stability should be able to take its financial issues very serious.It is from forcast and financilal projections that you will be able to venture into new business prospects.

 

[Ghost1]

Indeed I think it is important to have a proper financial statement and also the ability to read and interpret. Another thing is to keep a detailed log of all the transactions, income and expenses accrued over the working days.

So true. That's why companies employs accountant or any other professional in that field. The role of these personnel should no way be undermined

 

[Trexxxy]

So true. That's why companies employ accountants or any other professional in that field. The role of this personnel should no way be undermined

Well said. The work of the auditors, accountants and whatnot can't be underestimated, they are crucial to every business.

 

[Ub40]

First, I want to commend you for taking your time to come up with such a wonderful and useful presentation above. From the above, it is very clear that understanding financial statements cannot be overemphasized. It is just my opinion. Thanks for sharing.

 

[Skysaint]

Yeah, I do agree with the part of keeping track of your business transactions. It will help you in a lot of ways which includes knowing when your business is booming and when your business is about to face hard times.

 

[Justin]

If you have money to hire an accountant and book keeper, you do not have to understand each and every terms associated with your business. Business is all about team work and you need experts on every topic, it is not necessary to know everything.

 

[nimzy]

Financial statements or record of business transactions is very important to some extent that it helps to determine the rate of the growth of the business and also identify the level of it less performance which can be corrected to avoid loss in the business.

 

[Ghost1]

From what you posted I can deduct that you know some things about accounting, that is a good thing because not everyone of us knows accounting, it is however beneficial.

Lol. Same here the highest thing I can do is record expenses and income add and subtract then get my profit. Maybe every company needs to have an accountant to handle other complicated accounting aspects

 

[Kingstone]

You have said it al. They are very important in knowing the exact expenditure and profit that comes in. Leading your financial expenditures in the hands of a novice will only result in one thing; debt.

 

[Immilash1]

That's great. It seems like you have the idea of a book keeper or accountants.but the main important thing here is the financial state. You need to understand the financial state of the business.

 

[Godspower]

You have really taken time to explain the accounting books an entrepreneur should be familiar with in a business. A clear understanding of these financial statements will help in tracking the growth of a business.

 

[Emmy]

Financial statement shows the financial position or status of an organization. They include:
1. balance sheet which shoes the financial position of a business
2. Cash flow which states the cash inflow and cash outflow etc

 

[kinqzbitz]

Well financial statement are very important because it helps you to keep track of all your sales and all the profits you make in day and it makes you see if you are coming short in any way

 

[Syldan]

Yes, you have spoken well, about organisational financial statements which are very important and necessary for every business organisation to keeps record of its day to day business transactions. this will enable the organisation to have the record of its improvements or it failure.