Small businesses are quite mindful of creating annual financial reports, mainly for the purposes of filing (and saving) taxes and informing investors about company performance. But using these reports for internal decision-making is often overlooked.
There are more than 30 million small businesses in the U.S.[1], and a vast majority of them have less than 60 days of cash on hand.[2] That’s not just bad luck; that’s neglected financial management.
A critical task small business owners and managers should prioritize from day one is introducing accounting reports that explain what exactly is happening in their business. This requires going beyond standard financial reporting. And while this isn’t compulsory, if you’re serious about growing and scaling your business, it’s the key. Regularly analyzing your business data can help improve decision-making and streamline operations.
If you’re a small business owner or staff accountant, this article is for you. We discuss six accounting reports that are absolutely essential to analyze your business operations. Etch these in your day-to-day decision-making for sound financial health.
What are accounting reports?
Accounting reports are financial statements that compile a business’s financial activities over time to indicate how well the business