The financial statements that you must understand in your business

[Dowenship]

Generally when someone ventures into a business, one of the most important tasks is the bookkeeper or the accountant that manages and records the finance of the business. If you do not have the necessary skills to take on this task by yourself then you can revert it to another person that your employee, who is experienced and can handle such tasks as well.

Either way, whether you are handling it yourself or giving it to someone else to manage, you have to be able to understand some of the basic financial statement to ensure that you stay up to date with how your business is progressing. The three financial statements that I believe that you need to be versed in are:
1. The balance sheet - this shows yoru assets and liabilities of the business and ensures that there are no discrepancies
2. The income statement showing the expenses and the income of the business
3. The cash flow projection to show how cash is coming into and being spent from the business and may include future predictions as well.

Are there are other financial statements or requirements that you feel that an owner should be well versed in?

Hmm... Financial statement and requirement for a business owner to feel when versed.. The payroll statement is also important

 

[Hopey]

You really did a very nice break down there. Those are really necessary financial statement that one need to avoid in for a flexible business venture

 

[Spicywilfred]

as a business owner it is of great necessity that you should understand some basic rules of financial statement even if you end up hiring someone you should know these basic rules as it will help you to organize the monetary part of the business properly.

 

[Bookwormlux]

A business owner should be able to understand risk management, especially how it relates to his or her business. This would help them to not venture into things that would make them run into losses.

 

[Billy]

Generally when someone ventures into a business, one of the most important tasks is the bookkeeper or the accountant that manages and records the finance of the business. If you do not have the necessary skills to take on this task by yourself then you can revert it to another person that your employee, who is experienced and can handle such tasks as well.

Either way, whether you are handling it yourself or giving it to someone else to manage, you have to be able to understand some of the basic financial statement to ensure that you stay up to date with how your business is progressing. The three financial statements that I believe that you need to be versed in are:
1. The balance sheet - this shows yoru assets and liabilities of the business and ensures that there are no discrepancies
2. The income statement showing the expenses and the income of the business
3. The cash flow projection to show how cash is coming into and being spent from the business and may include future predictions as well.

Are there are other financial statements or requirements that you feel that an owner should be well versed in?

Well said. I find myself looking a the profit and loss report more than all these. But i must admit a balance sheet is one document that you cannot even risk to ignore.

 

[Alexandoy]

A business owner should be able to understand risk management, especially how it relates to his or her business. This would help them to not venture into things that would make them run into losses.

Risk management is not directly related to the financial statements which covers the assets, liabilities and net worth. If you are the business owner then you should understand how and what for is the financial statement so it will be useful to you. I wonder what is the role of risk management in the topic.

 

[Senator]

On preparing of this financial statement, if you don't know much on financial or accounting tasks, you get an accountant to do that for you. It must be well explained to you so that you make informed decisions from it

 

[Kayzzy3]

VRY

Generally when someone ventures into a business, one of the most important tasks is the bookkeeper or the accountant that manages and records the finance of the business. If you do not have the necessary skills to take on this task by yourself then you can revert it to another person that your employee, who is experienced and can handle such tasks as well.

Either way, whether you are handling it yourself or giving it to someone else to manage, you have to be able to understand some of the basic financial statement to ensure that you stay up to date with how your business is progressing. The three financial statements that I believe that you need to be versed in are:
1. The balance sheet - this shows yoru assets and liabilities of the business and ensures that there are no discrepancies
2. The income statement showing the expenses and the income of the business
3. The cash flow projection to show how cash is coming into and being spent from the business and may include future predictions as well.

Are there are other financial statements or requirements that you feel that an owner should be well versed

Vividly and aptly said, the importance of a clear financial statements of a business or company can not be overemphasized, it is the bedrock on which plans must be made, adjustments decided on and changes analysed.

All the parts or components of financial statement listed above must be taken into consideration.

 

[GIFTMICHAEL]

Always finding a way to create a spreadsheet or business database to balance sales, know how much came in and how much went out and ascertain the profit for the whole day.

 

[Kelly5]

The very vital aspect of the financial statement you cannot do without is the one that has to do with the income statement and expenses of the business. This is very important for you to always take note of

 

[Richard92]

The very vital aspect of the financial statement you cannot do without is the one that has to do with the income statement and expenses of the business. This is very important for you to always take note of

one financial statement that you must understand in your business as a business owner he is your account details,it is very important that you take note of the incoming money and money spent on expenses to know whether you are growing in the business or not.

 

[Bookwormlux]

Always finding a way to create a spreadsheet or business database to balance sales, know how much came in and how much went out and ascertain the profit for the whole day.

This is a very good option. Some wait for month end before doing these evaluations and so it becomes too much for them and they don't get to do it properly.

 

[BrolySSJ]

Always finding a way to create a spreadsheet or business database to balance sales, know how much came in and how much went out and ascertain the profit for the whole day.

Having a spreadsheet that is constantly updated and ensuring that you have a back up is very important because then any discrepancy can be addressed immediately.

 

[Senator]

The very vital aspect of the financial statement you cannot do without is the one that has to do with the income statement and expenses of the business. This is very important for you to always take note of

This alos very smart and the right thing to always look out for on your businesses financial statement. This will enable you with a simple glance tell where there is error and how to fix the imbalance between the two

 

[richee84]

One of the common problem of small businesses is bookkeeping for the transaction of all income and expenditures. For any business to survive it must have a good record keeping of all the transaction done by it. Someone without accounting knowledge should try and have the knowledge of it income and expenditures also know as statement of comprehensive income at least.

 

[BrolySSJ]

One of the common problem of small businesses is bookkeeping for the transaction of all income and expenditures. For any business to survive it must have a good record keeping of all the transaction done by it. Someone without accounting knowledge should try and have the knowledge of it income and expenditures also know as statement of comprehensive income at least.

This is why there are some businesses that will bring in external companies in order to do book keeping as it ensures that it is all fair and that there is a person to have the know how and look at it objectively.

 

[GIFTMICHAEL]

Having a spreadsheet that is constantly updated and ensuring that you have a back up is very important because then any discrepancy can be addressed immediately.

Yes, you're very correct dear, it helps to ensure we notice what is going out and coming in incase their is any discrepancy as you suggested.

 

[Alisco]

Exactly the best language that a business man will understanding is this bookkeeping and account book for proper running of the business.

 

[Chibson]

Understanding finance and financial management is generally very important for any businessman. It's one of the skills that makes a business successful.

 

[Bookwormlux]

The balance sheet is more important to me since it helps me to monitor how much of my earnings I am spending on assets and also liabilities. It's a good financial management policy.