Basic Accounting

Accounting involves identifying, analyzing, recording, and communicating the economic and financial information about an organization. Financial statements are the reflection of the financial heart of an organization.

Proper management of your business’ income and liabilities give you a better view of your financial statements. To assure business success and growth.

There are many accounting software programs which offer the ability to produce financial statements, but if your income and liabilities of the business is not properly maintained your statements will be ineffective.

Understanding financial statements help managers and owners make better decisions monitoring the business and plan for future growth. Financial statements give a clear understanding of the business’ strengths and weaknesses. They are essential for business owners who intend to succeed and expand their business.

The most important financial statements are 1) Balance Sheet - financial conditions at a period of time, review and analyse income, assets and liabilities and 2) Income Statement (P & L) - Summary of activity for a period of time. Income statements can point out specific items that are causing unexpected expenditures, such as phone, fax, mail, or supply expenses. Income statements can also track dramatic increases in product returns or cost of goods sold as a percentage of sales and 3) Cash Flow Statement - Cash generated and used during time.

When correctly prepared and properly interpreted, they contribute to an understanding of the current financial conditions, problems and possibilities of a company.

Most companies have a financial department which reviews and analyze their statements, which is a great asset for growth to the company. Bookkeeping & More Services recommend our clients review their financial statements on a monthly basis to determine the status of their business.

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