According to the IRS, the lion’s share of all
businesses in the United
States of America are Small Businesses.
Also, they report that very few of those small businesses survive to see their
Fifth Anniversary. Too often the businessman has a vision and desire to make
something happen, but they fall short of knowing the business of making money.
That is where an accountant
becomes invaluable. Even using business software sometimes is not enough.
Information in the wrong account makes for terrible decision making.
An accountant can verify that all information is
in the correct accounts, and that the proper decline and amortizations are
being taken. For some that may be enough to make informed choices, but
accountants can do so much more. The more you understand
the reports offered by your accountant, the better you become able to make
informed choices. Therefore, the choices you make based on those reports are
much wiser decisions. Granted, accountants are not miracle workers, and we
don’t use magic wands, but we do provide accurate, concise reports, and we
can explain each line of the report in detail so you identify why the report
shows what it does.
There are various reports that are available. The
Balance Sheet shows the value of the business since its first day, and shows
the value as of a given date. The Income Statement, sometimes called the
P&L or Profit and Loss, show the status of your Income or Loss for the
current fiscal year. That balance moves to the Balance Sheet at the
end of the year, and a new Income Statement begins for the new fiscal year. The
Cash Flow Analysis report helps you to identify if you have enough cash
available to pay your bills when they become due. It can also help
you project your sales volume needed to meet future bills.
These reports are not only important to you, but
any financier you use will also use these reports to gauge the credit
worthiness of you and your business. They look at the percentages of
Assets to Obligations, Income to Expense, and other ratios to help them make
informed decisions. These ratios are taken from the reports above that
your Accountants provides to you....continue reading click here
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