Running Your Own Accounting Reports? How an Expert Can Help
Accurate, comprehensive reports are your reward for maintaining good financial records in a cloud-based accounting application. You can find out in just a few seconds how all of those transactions you’ve been entering every day add up.
Reports like these are easy. You select the report you want to see from the list of dozens offered by accounting websites, customize it (date range, customers or accounts or items, geographical region, etc.) and run it.
There’s a handful of standard financial reports that you should be seeing at least once a month. They’re easy to run, but not so easy to customize and analyze in ways that will help you make better business decisions going forward. You may have seen their names if you’re using an accounting website but been unsure what they can tell you. They include Trial Balance, Profit and Loss (also referred to as an Income Statement), Statement of Cash Flows, Balance Sheet, and, General Ledger.
Most reports offered by accounting websites help you run your business day-to-day. They can tell you, for example,
- What items are selling well and which should be phased out.
- Who owes you money and whether they’re late paying by more than a specified number of days.
- Whether you’re current with your payroll taxes, and,
- Whether your expenses are getting out of hand.
Reports like Trial Balance and the Income Statement are more complex. They look at your business as a whole and can help diagnose its health, its past history and its possible future ups and downs. You might not be able to look at them and see what kinds of changes or problems they’re signaling, but financial advisors are experts at interpreting them.
This set of standard financial reports can help an accounting professional advise you on corrective actions you should take to improve your profitability and overall fiscal strength. If they’re created and analyzed on a monthly or quarterly basis, they can be valuable planning tools for you. They’re also typically found in business plans, and may be consulted in the process of income tax preparation.
A Trusted Partner
Can you get this information any other way? Not really.
Financial advisors are especially proficient at both designing reports and helping you understand the impact they have on your management decisions. Beyond interpreting the information provided by your Balance Sheet, for example, they can provide guidance on customizing the reports you run daily or weekly, like summaries and detailed breakdowns of your payables and receivables, your inventory, and your sales.
Working with an accounting professional periodically throughout the year can provide the insight you need to make the myriad choices necessary to be successful. You’ll still call the shots, but with a much more informed, comprehensive awareness of your company’s financial backbone.