Three big statements to keep an eye on your business

As a small business owner, it’s super important to know where you stand financially. There are three big statements to keep an eye on: the balance sheet, income statement, and statement of cash flows. These are together form the perfect tools to help you get a handle on your finances, make smart choices, and plan your future.

First up the Balance Sheet

The balance sheet. This tool shows you your financial situation up to a specific moment, like the end of a month, quarter, or year. It lays out what you own(assets), owe(liabilities), and how much your business is worth(equity). It’s key for figuring out how much cash you have on hand to cover bills and other short-term money problems. You can also spot any larger debts and make plans on how to handle them.

AKA: Profit and Loss

The income statement (AKA-P&L). This report is all about how much income your business is making and how much it’s expensing out over a certain snapshot in time. It tells you where your sales are coming from and what it’s costing to run your business. It is a business owner most looked at statement for figuring out your profits and whether your business will keep going strong.

Last but definitely not least: Statement of Cash Flows

Last but not least, the statement of cash flows. This management document shows you how much cash is coming in and leaving over a specified period, usually a month, quarter, or year. It sorts the cash into different categories to help you know whether your business is making money, investing in new things, or borrowing money. This report helps you plan for cash flow, ensuring that you are not left in a difficult situation when you require funds.

Three statements keep you on top of your business’s financial health

Together, these three financial statements are a must for staying on top of your small business’s finances. They help you keep an eye on your income, profits and help you to plan for the future. Staying ahead of any financial issue which may arise. Keeping these management statements current and available will keep you at the top of your small business’s health.