Preparing Financial Reports
One of the most important jobs that a bookkeeper does is financial reporting.
Preparing Financial Reports
One of the most important jobs that a bookkeeper does is financial reporting. It makes up a large chunk of their day because a detailed financial report usually includes preparing the following 3 documents:
Balance sheet
The balance sheet describes the overall value of your company, taking into account the value of your assets (such as cash and property), the value of your debts and liabilities, and the value of your equity (such as stock and the money you’ve put into the business). The formula for calculating a balance sheet is
assets = liability + equity, with the amounts on either side of the equation equal to each other.
Income statement
An income statement is a record of all income and shows the business’s gross profits and subtracts all the money spent to give a total net income over a given time period. An income sheet needs to be highly detailed, including every single dollar spent over the chosen time period. These expenses include business expenses, maintenance and rental fees, and employee salaries, to name a few.
Cash flow statement
A cash flow statement is similar to an income statement but only shows cash transactions, which means it includes all of your business expenses and sales. A cash flow statement does not include things like interest accruals from investments.
