Small Business Bookkeeping Tips: Best

Month End Reports To Use

One of the keys to successful small business bookkeeping is accurately

capturing and analyzing the results of your company’s

operations

Here are our Top Three Reports that we believe

are essential to nearly every business:

1) The Balance Sheet

With a well-implemented Balance Sheet, you can

evaluate your company’s ability to meet quotas by calculating your Working Capital or Current Ratio

You can also measure turnovers statistics for

accounts receivable and inventory to assess how

efficiently you are managing key assets.

These are just two examples of how the information provided by a proper

Balance Sheet can inform accountants. However, there are

various other aspects within them that are invaluable to understanding

the strengths and weaknesses of your operation.

2) The Income Statement

The income statement reflects performance over a

specific period of time.

The income statement can supply a lot of specific

information on the performances of various areas of interest such as: divisions, departments, and product

lines.

The income statement is able to answer questions such as…

- Is the company experience growth?- Are you gaining or losing market share?

- Is your pricing strategy keeping pace with costs?

-Are expenses for material, labor or overhead out of control?

And perhaps more importantly...-How do your revenue and expenses

compare to your budget?

3) The Accounts Receivable Aging Report

An accounts receivable aging report is perhaps the

most important tool for managing the influx of cash.

In managing receivables, two key principles stand

out.

1) First, even though your company may recognize revenue for a sale when their performance obligation has been satisfied, the revenue cycle isn’t complete until

the payment is received. Bad debts will offset future earnings

when they are reserved.

2) The longer a receivable is outstanding, the less likely it is to be

collected. The accounts receivable aging report provides a roadmap to focus your

collection activities and manage your customer base. Collections personnel

should generally pursue the oldest receivables first, as the prospect of getting paid deteriorates over time.