The 5 Most Important Accounting Reports You Need for Your Business

As a business owner, you are always working hard to stay on top of your finances, plan ahead for future growth and improve your current business. One of the best ways to manage your money with a plan is by utilizing the five most important accounting reports for businesses. Each of these reports is a valuable piece of your bigger financial picture.

The 5 Most Important Accounting Reports

1. Profit and Loss Statement: The most critical financial report for any business is known as the profit and loss statement, P&L statement or income statement. This basic report shows how much money your business made, how much money is available and where the money is coming from. Every business owner should check this report at least once a month to get a good idea of financial trends.
2. Balance Sheet: This is another one of the most important accounting reports, as it shows you exactly how much your business has on hand and owes at any given moment. Your assets might include things like accounts receivables, an investment account or bank accounts. The liabilities listed can include categories like business loans or credit cards.
3. Accounts Receivable Aging: Every business needs to bring in money to stay afloat, and these important accounting reports show you how much outstanding cash you are waiting to collect. The aging report indicates how well your business is collecting the money that you are owed. Review it regularly to see if certain clients or customers are routinely paying late or retaining large unpaid balances.
4. Revenue By Customer: In the same way that it’s good to know who owes you money, it’s also a great idea to know which clients are giving you the most business. The revenue by customer report is another one of the most important accounting reports that can guide you in strengthening your bonds with certain customers and avoiding revenue concentration.
5. Accounts Payable Aging: Finally, these important accounting reports show who you currently owe money to. You don’t want your clients to be late paying you, so you should go above and beyond to pay the vendors and partners that you owe money to as well.

Master Your Important Accounting Reports with MKS&H

MKS&H provides tax and accounting services to businesses of every size and in every industry. Our team can help your business gain confidence in your important accounting reports and make better, more educated financial decisions. Contact us today for a consultation.