Do you know why we create financial statements?
You're a good person, you want to do good. Just don't fall into the trap of giving away your time or knowledge for free, it doesn't do the good you think it will.
While not all small business owners fully understand the Income Statement and Balance Sheet, most recognise them and have a broad idea of what they are and how to use them. However, the Cash Flow Statement is probably the financial report most responsible for confusion, blank looks and mild panic in small business owners. This is a shame, because it’s actually an extremely handy report that can give you some very valuable insight into the health of your business.
Your Income Statement has a lovely healthy profit but your bank balance is moth-eaten and sad, how can both be accurate?
Managing your cash flow and forecasting not only helps you stay on top of things and stay in business, but it is also a vital part of business strategy. It should be your number one priority as a business owner.
A good bookkeeper and accountant are essential for recording financial information and keeping you up to date with your financial situation, if you have no idea how to read or use your financial statements, you are not alone.