The financial statements provide information about the financial health of your company.
Business owners, investors, creditors and the Internal Revenue Service uses these states to determine the performance of your company in a given period of time.
Some of the key reports are the Income Statement and Balance.
Income Statement
The Income Statement is a formal statement, which outlines the company’s operations (revenue and expenditure) for a specific period of time, usually a month or a year.
The owners of small businesses use the Income Statement to identify areas of your business that are above or below budget.
Items that cause an unexpected expense such as telephone, fax, mail, or supply costs, can be identified accurately.
The Income Statement can track dramatic increases in product returns or cost of goods sold as a percentage of sales.
It can also be used to determine tax liability on income.
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