Financial statements are the reporting lifeblood of every business. They are as necessary for internal management reporting as they are for external reporting such as tax and legal compliance responsibilities. They are always required for loan and finance applications.
They help you understand the past performance of your business and guide decisions to help predict the future.
Most financial reporting and accounting software packages produce the following:
- Profit & loss statement (P&L)
- Balance sheet
The P&L should be done on a monthly basis. Prepare a balance sheet for the start of the business, six months later and then at the end of the first year.
Your accountant will help you produce the following in a simplified form:
There are many financial reporting and accounting software tools that make it easy for you to produce simple and useful financial statements. Take the advice of your accountant when considering your software selection.