Creating a financial statement for your business is an important job. The statement provides the necessary insight to what’s going on with your assets, liabilities, income and cash flow. But with all these technical terms, how can you be sure you’re getting it right?
There are many potential uses for your statement. It can help you figure out the financial health of your company plan for the future. Lenders will require one when you’re applying for more money to develop your business. A lot can depend on doing it properly.
It needn’t be a difficult process if you break it down into stages. The first part is your balance sheet, which shows your business as it stands. You may have different forms of assets and liabilities all at once. If you’re confused as to what means what, it is worth looking at an online finance dictionary to clarify things.
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Next comes your income statement and cash flow. Cash flow is broken down into operating, investing and financing activities, which actually makes it simpler to see what’s coming and going. You can find templates online if you find Excel to be an intimidating prospect!
An accountant is expensive, so BusinessHacker made a detailed new infographic to help you through the flow of creating a business financial statement. It is intended to demystify this straightforward part of your business practice.
So next time you need to update your financial statement, power up your spreadsheet software and do it yourself. It’s only numbers — they won’t bite!