Keeping a close look at the financial statement of each business is crucial for every accountant no matter the industry.
A company needs to keep track of all transactions for legal purposes as well.
To be able to help your clients grow, you need to keep a close look at what’s going on in their business.
- Accounting reports can help you stay on top of your client’s financial endeavors.
- Account reports are statements that present the financial status of the company for a period of time.
Here are the basic accounting reports you need to use if you’re working as an accounting professional.
- Balance sheet report
The balance sheet report is an overview of the financial state of the business at the moment. It represents the company’s assets, liabilities, and shareholders’ equity and it can provide a basic evaluation for the capital return.
It gives an overview of what the company owns, what it owes, and how the business assets are being managed.
The balance sheet presents ROA (Return on Asset), ROE (Return on Equity), Working Capital Ratio, and Debt-Equity ratio.
- Cash flow statement report
The cash flow statement reports represent how a company manages its cash position. It measures how well the company generates cash to fund its operations and pay its debt.
In other words, it tracks the movement of money into and out of the company.
The report gives a great overview of the company’s liquidity and it also gives valuable information on how the performance can be improved. It helps keep business on track and help them grow.
The cash flow statement is actually a part of the mandatory report of a company’s financial report.
- Income statement report
The income statement report is one of the mandatory financial statements that represent a company’s financial performance for a given period.
It gives an overview of the company’s profit and loss. The income statement report can be really helpful when it comes to evaluating the company’s performance in different sectors and for different periods of time.
The report can give you information regarding the net income of the company. The net income is calculated when the total expenses and losses are deducted from the total revenues and gains.
The report can help make business decisions based on the numbers and help the company to grow because it gives important information such as the quality of operations and the efficiency of the management.
Accounting reports are not just tracking sheets for the expenses and income of a company. When done correctly, they can give important information regarding the current situation of the company.
Spending some extra time to do them right will have a great impact later on, so make sure you’re not skipping that step.