Keeping detailed records is imperative for any business, let alone small businesses that can live and die on the smallest of factors. What you might not know is that there are many more benefits that small business accounting can bring to the table.
Having the right accounting reports at your disposal can be a huge deal when it comes to improving, growing, and expanding your business. Here are a few of the reports that can help your company stabilize and grow.
Profit and Loss
This is hands down the most important report that any business has. This is the report that shows a business how much money they are making (which is a completely gloss-over explanation). This includes details of where your money is coming from and where you are spending it.
Knowing where your money is coming from and where it is going is an absolute must for any business. This allows for refinements to be made and allows you to cut down on unnecessary spending. Know what is working well for your business and what isn’t so you can make the necessary adjustments.
The balance sheet is right there with your P&L report as one of the most important reports that you need to have. Your balance sheet, to over-simplify, tells you what your company owes and has coming in. This includes basic assets like accounts receivables, bank accounts, and possibly an investment account.
Your balance sheet can also contain assets like computers, equipment, property, and any other physical and intangible property. This is your one-stop-shop for seeing what your business owns, what it owes, and where your liabilities are.
Revenue by Customer
While you should definitely be aware of who owes you money, you should also be aware of who is giving you the most money. Revenue reports are essential to see what you’re bringing in, but they can be even more helpful by letting you know what customer demographics to target.
This is, in essence, focusing on strengths in order to keep your business growing while you work on improving sales in other areas.