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THE Critical Financial Report Your Business Needs
Written by: Scott GregoryArticle Overview: If you attend a baseball game, they have a scoreboard, don’t they? Same goes for football and golf, right? Does your business have a scoring system? If not, it needs one…badly.
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Free Download - QuickBooks 2011: Improvement to Closing Date Functionality By Scott Gregory |
THE Critical Financial Report Your Business Needs
The good news is that your scoring system is already built into your accounting software. Your scorecard is called the Income Statement (also known as the Profit and Loss Statement). Regardless of what you call it, this report gives you the inside story on your hits and misses, home runs and errors.
The basic components of an Income Statement are:
Revenues – a summary in dollars of the products or services you sold
Expenses – a summary in dollars of the checks written and bills you paid
Cost of Goods Sold – a special type of expense account for those businesses that carry inventory
The Income Statement can be run for any given time period. Ideally, you’ll have one for each month of operations. To make the report even more meaningful, you can compare the current month results to those of the prior month or even the same month last year.
The bottom of the Income Statement tells you right where you stand by identifying either a net profit or net loss. Net profit means that your revenues were higher than your expenses (a good thing!). Net loss means your expenses were higher than your revenue (a bad thing).
While accounting software makes it easy to generate the Income Statement, it is critical to ensure the data on the report is accurate. Breakdowns in your accounting system can very easily distort the results of this report and lead to bad or misinformed decisions about your business.
It is essential to have confidence in your accounting system so that the scorecard you see each month is an accurate reflection of your activities. In golf, you are penalized for keeping the wrong score. In business, the penalties can be far worse.
The Basics of a Financial Report that Anyone Should Know
Report presentations to provide clarification of your financial position
Financial Report: Reading the Balance Sheet for Making an Investment Decision
7 Sure-Fire Signs of Trouble in Your QuickBooks File
Personal vs. Business Finances
Article Tags: free quickbooks tips, improving profit, profit and loss in quickbooks, quickbooks report center, understanding the quickbooks profit and loss report
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Related Forum Posts
Exclusive: Interview with Results
- Hi Forum Members,
I'm helping start up a Business Coaching and Consulting company here in Toronto, Ontario, Canada (a Subsidiary of RSC Business in Los Angeles).
As a Research and Development Intern I am required to practice my listening and interview skills by surveying Small and Medium Businesses on thier Business.
This Survey is designed by RSC Business to also assist the Business being interviewed more insight into their own business.
I am looking to interview about 30 businesses across North America over the span of 3 months.
At the end of these interviews I will be publishing a report of the results and they will be made available for free to the Interviewees. The Report data will include responses from a minimum of 100 interviews.
I would like to extend this opportunity to members of the Forum.
If you would like to have this short 20-30 minute interview conducted on your Business and you reside in North America please send me an email or PM.
Please contact me at andy[at]jvprosperity[dot]com to arrange our interview and to get free access to the results when they are published.
My entry
- 1. The Best Business Books Ever: The 100 Most Influential Business Books You'll Never Have Time to Read
- this is a fascinating book about the history of Business theory, and I'd recommend it to anybody.
2. The Big Book of Small Business: You Don't Have to Run Your Business by the Seat of Your Pants, by Tom Gegax. Ditto.
3. PADI: The Business of Diving Book
Okay, so this book won't be of use to anyone who doesn't want to start a scuba store, but I did, and this book was of course invaluable to me in reaching that goal.
Re: Global Moderators
- Hi GT,
In my case, I only have the Report Post and the Quote buttons.
Future Financial Corporation
- I've never heard of Future Financial Corporation
is this a new company?
Re: How Much Is Your Website Worth?
- I guess it is for the website as the section which gives the value is called "Site Value Report".
What do you think dnscoop is missing when it values your site?
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