Usually people don’t feel the need of managing account reports for small scale businesses as the annual revenue is quite low when compared to large scale businesses. However, it is equally important to create and manage accounting reports to keep tracks of taxes, profits, and losses. These significant reporting habits will help your business in flourishing in all the directions of growth.
Scroll down to get know the details of the accounting reports.
Income statement
Also known as profit and loss statement, it is a highly vital and basic report that helps in generating creates further sub-reports of sales. It keeps a record of all on going sales, profits, losses, and in short how good is your business doing. It will be divided in various sections such as total outgoing and in-going cash. Out going cash includes monthly investments, office expenditures, employees’ packages, and many more to mention. In going cash accounts for capital generated from the customers. It is advisable to update this report on monthly basis to smoothly manage the capital flow. It help you predict the income of upcoming month, the sales trend, and a quick representation of company’s performance.
Balance sheet
An easy tabular depiction of your company’s assets, liabilities, and all sorts of equities at a particular time instant. Your assets might include revenue from profits, bank accounts, and other physical properties like office infrastructure. Common types of business liabilities are debit cards or bank loans. The balance sheet calculates the company’s assets and liabilities to sum up the monthly equities. In simple words, it highlights the difference between what a business owns and what it owes. The difference should always be positive and keep exponentially growing.
Payable aging
The common thing that goes against the company is their behavior of paying late to the customers. You should be highly pro-active in paying your customers’ dues on time. A/P reports will tell how much you and to whom you owe the amount. You will be asked to keep the records updated with amount and due date. It will save you from calculating the dues again and again at the end of the month. Less stressful, no?
Receivable aging
Business is not a charity work but a job that requires pretty much hard work. Just like A/P reports, it is recommendable to manage a A/R report so that you can have a smooth collection of amount from customers. Delayed payments can have a significant effect on financial management. You will have a list of customers who pay on time, delay the payment, or are making excuses. Paying equal attention to A/P and A/R reports promotes your small-scale to large-scale one.
Revenue generated from customer
Customers are indeed a vital asset for any company. Hence, it makes a good sense of recording how much and how many of your clients are giving a good business. Revenue accounting report allows your to easily focus on the customers with low or zero sales to reinvest their trust in your company. Surely, a good tactic to build brand-client relationship in order to generate lucrative business income.
Tip: Avoid relying on customers with high sales as it can put you in “revenue concentration risk.”
Your business mantra will get disturbed once these customers step back.
The wrap up
These are few but fundamental accounting reports used for all types of businesses. By reading the content above, I am sure you will be pretty much convinced to start these reporting schedules for your small-scale business too. Good luck then!
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