Financial Reporting - What You Need to Know

What do you need to know?	Reports That Will Answer Your Question.
What is the overall profitability of your business?	Profit and Loss Report: This report is also known as an income statement. It is a summary of income and expenses for the period so you can tell whether you're operating at a profit or loss.

What is the profitability of each segment of your business?	Profit and Loss Report, By Division: Provides you with profit and loss information for each segment of your business. For example, if you are a contractor it would report income or loss from new construction and remodels separately. Work in Progress Schedule: Keeps you updated on work "in the pipeline." Job Cost Report: Provides separate cost information on each job

How well your business is doing compared to last year?	Profit and Loss Comparison Report: Includes previous data from the same period last year, last quarter or last month.

How does your balance sheet look?	The Balance Sheet: This provides a financial snapshot of your company as of a specific date. The report calculates how much your business is worth by subtracting all the money your company owes (liabilities) from everything it owns (assets). The result is what your company is worth.

What about your cash flow picture?	Statement of Cash Flows report: This shows how your cash position changes over a period of time. It shows the amount of cash earned from profit, where you received additional cash and where your cash was spent. It also shows trends such as comparisons to the previous year, and whether you have enough cash coming in to meet your operational needs.

Who are your Customers?	A complete customer list will identify who you are doing your business with and provide you with their contact information at your fingertips.

Who owes you money?	A report of outstanding invoices lists overdue accounts receivables, grouped by customer and job. Aging accounts receivables report will indicate which accounts have been outstanding 30, 60, 90 days or more, and will help you identify from which customers you need to do a better job of collecting payment.

Which vendor do you owe money to?	The vendor balance summary report shows your company's unpaid balance with each vendor. An aging accounts payable report will show you how long a balance has been outstanding. Many vendors allow cash discounts if invoices are paid within a specified time from the date of invoice, so identifying those vendors and being on top of payments is like money in the bank.

Which vendors you made purchases from?	Vendor purchases summary report subtotals your purchases by vendor. Besides providing basic useful information, you can also use this as a tool for negotiating favorable terms with your vendors.

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